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Danske Bank Analyst View

ECB
  • The June ECB meeting will signal the end of net purchases under the APP and the first rate hike in July, although there will be no specific guidance on the size of the first rate hike.
  • Danske expects the ECB to hike by 25bp each meeting until March 2023, with risks skewed towards a 50bp hike in H222 (with July or September being the most likely).
  • The ECB is expected to pause hiking after Q123, although there is a risk of additional hikes. Danske believes that the balance of risks is for more than 100bp of tightening in 2022, rather than 100bp in cumulative hikes in 2023.
  • Updated staff GDP forecasts: 2022 (-1.0pp to 2.7%), 2023 (-0.4pp to 2.4%), 2024 (unchanged at 1.6%)
  • Updated staff inflation forecasts: 2022 (+1.4pp to 6.5%), 2023 (+0.6pp to 2.7%), 2024 (+0.2pp to 2.1%)

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