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Goldman Reverts To 3.75% Depo Call, Matching Market Pricing

ECB
Goldman Sachs analysts have upped their terminal ECB depo rate hike pricing to 3.75% - including 25bp hikes in May, June, and July. This represents a switch back to their pre-banking crisis forecast, having dropped it to 3.50% following the March ECB decision.
  • They see a gradual pace (ie 25bp vs 50bp) returning ahead amid banking stresses, some cooling in core inflation ahead, and uncertainty around the global outlook (including Fed hikes), but see 25bp vs 50bp in May as a "close call" that could hinge on stronger data in coming weeks.
  • Their current call is exactly in line with market pricing is for a 3.75% terminal depo rate, although the market sees the peak reached in October (down 1.5bp on the day).

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