Let’s dive straight into the calls (h/t @ MNI Markets).
Deutsche Bank- 25 bps rate cut- “Even with the US tariff pause, the arguments now clearly favour a cut”- “The hit to growth from reciprocal tariffs, uncertainty and financial conditions likely exceeds what the ECB
was expecting”- “We expect the “meaningfully less restrictive” language to remain in April despite another rate cut. In
combination with the view that inflation is returning to target, this has an implicit dovish leaning”- ECB will keep the data-dependent, meeting-by-meeting approach to
determining the “appropriate stance”- “We think the risks of disinflation are being underestimated, and we hold our 1.5% terminal rate view”
Societe Generale- 25 bps rate cut but not ruling out a 50 bps move “to more clearly exit the restrictive stance”- “The downside risk to growth and inflation should dominate any worries over one-off increases
in the price level”- “The message after the April
meeting will be much more focused on the disinflationary forces, stemming from weaker global and US
growth, lower energy prices, a stronger EURUSD, and a higher risk of China redirecting excess capacity
into Europe”- “While we would argue that neutral is likely somewhat higher than the ECB’s 1.75-2.25% in normal
conditions, we think there is margin for the ECB to err on the downside under the current conditions”
UBS- 25 bps rate cut- “We do not think the ECB will cut rates by 50 bps, given the current uncertainty over the degree
of EU retaliation (which would likely be inflationary), the duration of US tariffs at current levels (i.e
