ECB Meeting Next Week – Danske Bank Expects 75bp Rate Hike

The European Central Bank’s remarks to Jackson Hole were on the hawkish side:

  • 4 ECB speakers over the weekend: Concerns voiced over euro weakness and expectation of September rate hike
  • Money markets now expect a more aggressive rate hike from the ECB next week as well

This from Danske on what they expect at the European Central Bank meeting (September 8):

  • “We now expect the ECB to hike 75bps next week, to be followed by 50bps in October and 25bps in December, but recognize the heightened uncertainty on the latter two expectations. This represents +25 basis points for our previous rate hike expectations at the September and October meetings, respectively, and we now see the end point for the ECB deposit rate at 1.5 %”.

    “We believe the Eurozone will face a recession and the ECB will rise, but we also recognize that even without the ECB tightening, the European economy was in dire straits to start with a worsening energy crisis. “


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