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MNI ECB Preview - Hawks Back Down, ECB On Hold

  • The ECB is not expected to deliver any material policy changes at the October meeting. In addition to clearly indicating in September that policy rates are at (or least very near) peak levels, the ECB will remain on hold given the recent downside inflation surprise, weak growth, delayed impact of previous tightening and notable dilution of hawkish pressure on the GC.
  • Focus will now shift to the outlook for PEPP, reserve remuneration and the first rate cut. The ECB will indicate that the first of these is being discussed, the second may be addressed at a later date, while the third is not even up discussion at this juncture.
  • Full preview including summary of sell-side views here:

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