Several Analysts Raise ECB Hike Forecasts In Wake Of Meeting

Several analyst ECB terminal rate call changes came out following yesterday's meeting. They now range widely, from 2.75% to 3.75%. Some examples:

• ABNAmro: "given the ECB’s communication we now expect a 50bp hike at the February meeting (previously 25bp), but continue to pencil in a 25bp move in March. So we lift our forecast for the peak ECB rate to 2.75% from 2.5% previously."
• BofA: "It's hard to imagine a more hawkish policy meeting. We raise our terminal depo rate forecast to 3.50% by June (+25bp)."
• Danske: Add another 50bp to peak rate forecast to 3.25% (50bp in Feb is unch, but adding 50bp in Mar from 25bp prior; and 25bp in May from zero. And remain "open to further rate hikes in June".
• ING: Vs previous expectation of another 50bp in Q1 2023 to 2.50%, "we now expect the ECB to hike interest rates by another 100bp in the first quarter of next year [to 3.00%]. A final 50bp hike in the second quarter can also no longer be excluded and only time will tell whether this will then have been a policy mistake or not."
• Morgan Stanley: "We now expect a total of additional 75bp in rate hikes in 2023, with a terminal rate of 3.25%" in May (Up from 2.50%)
• SocGen: Raised its ECB terminal rate call to 3.75% from 3.00% - including two further 50bp hikes followed by three 25bp hikes.
• TD: Now sees a 3.75% terminal rate, vs 2.25% seen going into the meeting.