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Big banks add October cut to ECB forecasts



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Adds change to Citi forecast

LONDON, Oct 2 (Reuters) -Major brokerages, including Goldman Sachs and JPMorgan, now expect the European Central Bank to deliver a quarter-point cut at its Oct. 17 meeting, on the back of recentdata showing economic weakness and slowing inflation.

Market pricing now reflects around a 90% chanceof such a rate cut, which would follow reductions at the ECB's June and September meetings, as the data pushes policy makers to focus more on growth and less on price pressures.

Euro zone inflation dipped below 2% for the first time since mid-2021 in September, according to Tuesday data, while last week surveys showedeuro zone business activity contracted sharply and unexpectedly in September, as the bloc's dominant services industry flatlined and a downturn in manufacturing accelerated.

Sources told Reuters that ECB policy doves are preparing to fight for an October rate cut - though this would likely meet resistance from more conservative peers - a turnaround from the aftermath of the ECB's September meeting when they saw an October move as unlikely.

Here are the latest forecasts from some brokerages.

Brokerage

Oct '24 rate cut estimate (bps)

Dec '24 estimate (bps)

Terminal rate/end '25 forecast

Goldman Sachs

25

25

2.0% (June 2025)

HSBC

25

25

2.25% (April 2025)

BNP Paribas

25

25

2.25% (end-2025 forecast)

RBC

25

25

2.25% (April 2025)

JPMorgan

25

25

2.0% (June 2025)

Barclays

25

25

2.0% (June 2025)

TD Securities

25

25

2.5% (March 2025)

Jefferies

25

25

Close to 2.0% (end 2025)

Deutsche Bank

25

25

2.0%-2.5% (mid-2025)

Commerzbank

25

25

2.5% (June 2025)

Bank of America

25

25

1.5% (end-2025)

Nomura

25

25

1.75% (Sept 2025)

SEB

25

25

2.0% (June 2025)

Citi

25

25

1.5% (Sept 2025

UBS IB

-

25

2.25% (end-2025 forecast)

ING

-

25

2.25% (end 2025 forecast)

BBVA

-

25

2.75% (November 2025)





Reporting by EMEA markets team and the Broker Research team in Bengaluru; Editing by Amanda Cooper and Alun John

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