1. Wells Fargo: We expect the ECB to keep the deposit rate unchanged at 2.50%. The focus of the meeting will be whether the ECB signals that "tighter funding conditions require more patience," while maintaining policy flexibility without completely closing the door to rate hikes. We still consider a December rate hike as our baseline scenario.
2. Mitsubishi UFJ: We expect the ECB to keep the deposit rate unchanged at 2.50%. With rising sovereign bond yields and overall tightening financial conditions, policymakers have reduced their urgency to act. Our baseline scenario remains a further 50 basis point rate hike, with the next rate hike expected in December.
3. Danske Bank: We expect the ECB to keep the deposit rate unchanged at 2.50%. We expect the ECB to implement its final 25 basis point rate hike in December, bringing the deposit rate to a peak of 2.75%, and maintaining that level throughout 2027. It is worth noting whether Lagarde will formally announce her early resignation.
4. Morgan Stanley: We expect the ECB to keep interest rates unchanged, primarily because policymakers need more data to reassess their current policy stance. We expect the ECB to signal that it is closely monitoring changes in sovereign bond yields, but is not yet concerned to the point of needing a direct policy response.
5. Rabobank: There are currently no signs that energy inflation is spreading to the broader areas of wages and price setting. The ECB does not need to accelerate its pace of rate hikes and can wait until December to take action.
6. Nordea: We expect the ECB to keep interest rates unchanged, with the next rate hike likely in December. Market focus is on how the ECB will respond to the sell-off of French government bonds and tightening financing conditions. The baseline forecast remains that the ECB will raise interest rates by 25 basis points each in December and March 2027, bringing the deposit rate to 3.00%.
7. Nordea Bank: We expect the ECB to keep interest rates unchanged. Based on recent statements from officials and current market pricing, a 25 basis point rate hike in December remains the baseline scenario, with a further 25 basis point hike possible in March next year. The October meeting is more likely to be seen as a "mid-term checkpoint" between the two rounds of macroeconomic forecasts in September and December.
8. Brown Brothers Harman: Expects the European Central Bank to maintain its deposit rate at 2.50%. Underlying inflation in the Eurozone and tightening financial conditions have given policymakers room to wait; however, resilient economic activity and the expectation that inflation will remain above target for an extended period solidify the expectation of a December rate hike to 2.75%.
