Nomura Securities: June Rate Hike Just the Beginning, ECB Likely to Follow Suit in September

BlockBeats News, August 13th. According to foreign media reports, 83% of economists expect the European Central Bank to raise the deposit facility rate by 25 basis points to 2.50% in September; 80% of economists expect the deposit facility rate to remain at 2.50% by the end of the year; 63% of economists expect the deposit facility rate to stay at least at 2.50% until the third quarter of 2027. Out of 69 surveyed economists, 57 (approximately 83%) expect a rate hike next month, a higher proportion than the 72% before the July meeting and 65% in June. This indicates that following the rate hike in June, there is a growing consensus in the market for another rate hike by the European Central Bank in September.

Nomura Securities pointed out: "The longer and higher oil prices stay at their current levels, the greater the risk of second-round effects. The European Central Bank cannot act until these effects are seen, but they can act preemptively - which is what the European Central Bank has always done. The risk is that if the European Central Bank raises rates only once, it will look like a minor adjustment, and as is well known, monetary policy cannot be operated in this way. If they raise rates once, they are likely to do so again. Considering that the June rate hike was an obvious choice for the European Central Bank, we believe that the likelihood of another rate hike is high." (FXStreet)