What are the calls going into the ECB policy decision later? ...Middle East

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What are the calls going into the ECB policy decision later?

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Deutsche Bank

    25 bps rate cutFocus on staff projections, whether capturing the trade war and defense spendingAlso focus on if policymakers continue to think that policy is still "restrictive"At the balance, "restrictive" to probably stay for one more meetingThat means the policy statement can effectively remain unchangedExpect Lagarde to emphasise that policy path will follow the data, not be constrained by neutral talkA rate cut in April remains our baseline

    ING

    25 bps rate cutThe critical part is whether the ECB will drop the "restrictive" label from its official stanceA complete drop would be too hawkishSo, there might just be some slight modification i.e. “less restrictive” or “hardly restrictive anymore”

    Societe Generale

    25 bps rate cutReference to "restrictive" should remainThat would suggest another rate cut at the next meeting in AprilThat is in line with our call but we doubt that the data is sufficiently clear yet to send that messageAfter the April rate cut, ECB will be in a better position to reassess medium-term outlook and risksThat could see the ECB possibly shift to quarterly rate assessments

    Barclays

    25 bps rate cutExpect the ECB to remain non-committal and data-dependentApril meeting is live and we forecast another rate cutExpect Lagarde to express similar views to January press conference as outlook is little changedWe anticipate consecutive 25 bps cuts until June, before proceeding with 25 bps cuts in September and December for a terminal deposit rate of 1.50%But Germany's fiscal reform could give the ECB a reason to reach a slightly higher terminal rate than we currently expect; though it doesn't change the terminal rate forecast itself

    CIBC

    25 bps rate cutGrowth projections likely to be downgraded in the coming yearThe risk is that the ECB pauses in April or JuneGuidance around timing and rate path to come will be the focal points this meeting

    Goldman Sachs

    25 bps rate cutA softening of the language around "restrictive" is most likelyECB might prefer to say that policy remains "somewhat restrictive”We are looking for a small downgrade to growth, broadly unchanged core inflationECB to o reiterate that growth risks are to the downside and the disinflation process is well on trackA pause in April is “possible if disinflation stalls or if activity data surprises notably to the upside"We continue to think that rate cuts in both April and June are likelyThat will be followed by one additional cut in July for a terminal rate of 1.75% This article was written by Justin Low at www.forexlive.com.

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