Huitong Financial APP News-Nomura Securities adjusts its monetary policy towards the European Central Banknceducationlotterypowerballforecast, abandoning previous expectations for a rate cut in July. The financial services group currently expects the European Central Bank to cut interest rates by 25 basis points in June, September and December this year, followed by similar rate cuts in March, June and September next year.
The next two ECB interest rate decisions will be held on June 6 and July 18, respectively.
Nomura Securities decided to change its forecast for the ECB to cut interest rates based on several economic indicators: the euro zone labor market and wages showed flexibility, and service sector inflation continued.
In addition, economic growth in the eurozone is rising, and ECB rhetoric has recently become more hawkish. These factors have prompted Nomura Securities to predict that the European Central Bank will adopt a more gradual approach to cutting interest rates.
Nomura maintains final interest rate forecast at 2nceducationlotterypowerball.50%, indicating that it still expects the ECB to cut interest rates to the upper end of what it considers to be the neutral range. This revision includes an additional interest rate cut in September of the following year to be consistent with this terminal interest rate view.
Analysis by Nomura Securities shows that due to stronger economic activity data in the euro zone, strong demand, encouraging labor market, higher-than-expected wage growth, and continued inflation in the service sector, the European Central Bank may adopt a more cautious pace of interest rate cuts to maintain a certain degree of monetary restraint.
In addition, Nomura pointed out that even traditionally dovish members of the ECB's Governing Council are advocating a smaller rate cut this year and supporting a slower pace of easing than initially expected.
Although the ECB's actions still depend on data, and if economic conditions deteriorate, the ECB may take more aggressive measures to cut interest rates, Nomura Securities believes that the most likely scenario is that the ECB will gradually cut interest rates three times this year. Based on the above news, although Nomura believes that the European Central Bank will not cut interest rates in July, it still believes that it will gradually cut interest rates three times this year, in June, September and December respectively. This will suppress the euro and be wary of the risk of the euro falling back against the US dollar.
Daily chart of EUR/USD At 10:41 on May 20, Beijing time, EUR/USD was quoted at 1.0873/74