Nomura Securities: June Rate Hike Just the Beginning, ECB Likely to Follow Suit in September

August 13th, according to foreign media reports, 83% of economists expect the European Central Bank to raise the deposit facility rate by 25 basis points to 2.50% in September; 80% of economists expect the deposit facility rate to remain at 2.50% by the end of the year; 63% of economists expect the deposit facility rate to remain at least at 2.50% until the third quarter of 2027. Of the 69 economists surveyed, 57 (about 83%) expect a rate hike next month, a higher proportion than the 72% before the July meeting and 65% in June. This indicates that following the rate hike in June, market consensus for another rate hike by the European Central Bank in September is strengthening.

Nomura Securities pointed out: "The longer and higher oil prices stay at the current level, the greater the risk of second-round effects. The European Central Bank cannot take action until these effects are seen, but they can act in advance – which is exactly what the European Central Bank has been doing. The risk is that if the European Central Bank only raises rates once, it will look like a minor adjustment, and it is well known that monetary policy cannot operate in this way. If they raise rates once, it is very likely that they will do so again. Considering that the rate hike in June was an obvious choice for the European Central Bank, we believe the likelihood of another rate hike is high." (FXStreet)