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ECB VIEW: Sellside ECB views: All look for October cut, terminal rate 1.50-2.50%

ECB VIEW
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  • We have seen 22 updated ECB sellside calls over the past few days, all of which have added an October 25bp cut to their base case (and all of which expect a further 25bp cut in December).
  • Only 5 of these 22 analysts (23%) expect the ECB to keep rates on hold in January 2025 rather than continue with sequential 25bp cuts (BNP, Commerzbank, Danske, Jefferies and SocGen). All analysts then look for another 25bp cut in March 2025.
  • We haven't seen any firm reiterations that an October cut is not a base case (but there are still a couple of sellside analysts that have not formally updated their calls yet but have flagged the risks of an October cut post-HICP data).
  • However, looking at estimates of the terminal rate (or end-2025 forecast rate where the terminal rate is not specified), there is a range of views with analyst forecasts ranging from 1.50-2.50%.
  • Commerzbank, SocGen and TD Securities are the most hawkish - looking for a 2.50% terminal rate.
  • Bank of America and Citi are the most dovish with Citi looking for sequential cuts to 1.50% by Sep25 and BofA to 1.50% by end-2025.
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  • We have seen 22 updated ECB sellside calls over the past few days, all of which have added an October 25bp cut to their base case (and all of which expect a further 25bp cut in December).
  • Only 5 of these 22 analysts (23%) expect the ECB to keep rates on hold in January 2025 rather than continue with sequential 25bp cuts (BNP, Commerzbank, Danske, Jefferies and SocGen). All analysts then look for another 25bp cut in March 2025.
  • We haven't seen any firm reiterations that an October cut is not a base case (but there are still a couple of sellside analysts that have not formally updated their calls yet but have flagged the risks of an October cut post-HICP data).
  • However, looking at estimates of the terminal rate (or end-2025 forecast rate where the terminal rate is not specified), there is a range of views with analyst forecasts ranging from 1.50-2.50%.
  • Commerzbank, SocGen and TD Securities are the most hawkish - looking for a 2.50% terminal rate.
  • Bank of America and Citi are the most dovish with Citi looking for sequential cuts to 1.50% by Sep25 and BofA to 1.50% by end-2025.