HSBC: Lagarde is likely to reinforce the message that it is too early to talk about rate cuts... We do not expect explicit guidance on the possible timing of the first cut.

ING: We see a good chance that the overall message at this meeting will fall short of endorsing aggressive rate cut expectations.

Goldman Sachs: We see an April ECB rate cut on a stronger inflation retreat.

Societe Generale: We predict that the ECB won't rock the boat today as the central bank is expected to communicate a more neutral language on rates. They should acknowledge recent progress on inflation but will wait before declaring victory on that front just yet. We also see the ECB revising their projections to see inflation closer to target in 2025, which paves the way for rate cuts in 2H 2024.

JPMorgan: “I think the ECB are going to do something similar” to what the Fed did, “They won’t be too explicit in endorsing the cuts for next year, but what they will have to appreciate is the change in inflation.” According to Jason Davis, JPmorgan.

PGIM: “On the face of it, it feels like bringing forward the end of reinvestments is quite a hawkish signal,” Katharine Neiss, chief European economist at PGIM, said. “Ironically, the market is going to take it as a dovish signal, because by announcing something on PEPP now, it effectively gives them the nimbleness, the ability to bring forward cuts early next year if they deem that to be necessary for the euro-area economy.”

Deutsche Bank: While the ECB should acknowledge the more positive inflation developments as of late, they will want to steer clear of declaring victory just yet. That should see the central bank maintain its policy guidance on keeping rates higher for longer in order to get inflation back to the 2% target.
That being said, the struggling Eurozone economy and better inflation outlook suggests that the risks on rates are tilting towards earlier and larger cuts. We expect the first rate cut to come in April but does not rule out the possibility of a move in March next year. As a whole, they see the ECB cutting rates by 150 bps in 2024 with 50 bps rate cuts in April and June.
We predict, after the dovish showing by the Fed yesterday, the odds of the ECB being more dovish have also increased somewhat - even if they have some room to stick with the status quo today.

November 13th Poll:

  • The ECB deposit rate is to remain at 4.00% through year-end - Poll, all of 72 economists.
  • The ECB is to wait until at least Q3 2024 before cutting rates - Poll, 40 of 72 respondents.
ECB Meeting Minutes [November 23rd]:
  • ECB Accounts: Governing council should be ready, on the basis of an ongoing assessment, for further interest rate hikes if necessary.
  • ECB: Further hikes are not part of the current baseline scenario.

ECB members comments:

  • ECB's Holzmann: The ECB won't cut interest rates in 2Q. [Nov 17]
  • ECB's Wunsch: The ECB may have to tighten more in case of an oil shock. [Nov 17]
  • ECB's Villeroy: The ECB won't raise rates again, excluding surprises. [Nov 23]
  • ECB's Vujcic: There are no interest rate cuts expected in the short term [Dec 5]