Debate at the ECB

Posted on October 25, 2022 We open a week where the meeting of the European Central Bank, the political decisions in the United Kingdom and the publication of results by CS will mark the future of the markets. Regarding the ECB meeting, no surprises are expected on the rate front this coming Thursday, the doubts come from the liquidity part, after several leaks to the press. The market has priced in a 75 bps hike, leaving the deposit rate at 1.5%. The ECB’s position of accelerating the rate hike process given the expected economic downturn in the coming months is clear and has been conveyed this way by all of its members. Possibly, at the December meeting another 75 bps will be raised in line with market expectations. The path of inflation (9.9% in September) leaves no room for a less aggressive position and once again, the debate between the members of the ECB (hawkish vs. dovish) is beginning to emerge regarding the path to adopt once the environment is reached of 2.25% – 2.50%, which can be considered close to the restrictive ground. The market is already discounting increases close to 3% by mid-2023 and a change in the remuneration of excess liquidity that entities have deposited with the ECB is expected. INFORMATIONTitleDebate at the ECBDescriptionWe open a week where the meeting of the European Central Bank, the political decisions in the United Kingdom and the publication of results by CS, will mark the future of the markets. Author GLOBALCAJA