6 Nov 2013
Flash: Nomura's client survey sees ECB cutting rates Dec - Nomura
FXstreet.com (Barcelona) - Nomura has published a global client survey to gauge market's expectations for the November and December ECB meetings. The results are shown below.
Key Quotes
"Participants expect the ECB to lower its reference rate in December (54%), although not November (only 15%)."
"If there is a rate cut at the November meeting, a majority of participants expect the Dec 2015 Euribor to fall by 0-10bp and EUR/USD to fall by 0.5-1.5% Expectations are for the ECB to possibly announce another LTRO this year (33%). But there is a general consensus that the ECB deposit rate will not be negative in the next 6 months (only 15% believe it will be)."
"If the ECB does cut at the November meeting, expectations are that the December 2015 Euribor contract yield will decline between 0-10bp and EUR/USD will be lower by 0.5% to 1.5%. Also, expectations are that, if there is a cut, the 10 year bond spreads between the US and Germany will widen somewhat between 0-5bp (33%) and more than 5bp (also 33%)."
"Finally, Eurozone inflation is expected to drop below 0.5% over the next 12 months by almost half of survey participants (48%). From a trading perspective, the biggest surprise outcome of this week‟s meeting would seem to be a tone in the press-conference, which does not hint at a rate cut in December."
Key Quotes
"Participants expect the ECB to lower its reference rate in December (54%), although not November (only 15%)."
"If there is a rate cut at the November meeting, a majority of participants expect the Dec 2015 Euribor to fall by 0-10bp and EUR/USD to fall by 0.5-1.5% Expectations are for the ECB to possibly announce another LTRO this year (33%). But there is a general consensus that the ECB deposit rate will not be negative in the next 6 months (only 15% believe it will be)."
"If the ECB does cut at the November meeting, expectations are that the December 2015 Euribor contract yield will decline between 0-10bp and EUR/USD will be lower by 0.5% to 1.5%. Also, expectations are that, if there is a cut, the 10 year bond spreads between the US and Germany will widen somewhat between 0-5bp (33%) and more than 5bp (also 33%)."
"Finally, Eurozone inflation is expected to drop below 0.5% over the next 12 months by almost half of survey participants (48%). From a trading perspective, the biggest surprise outcome of this week‟s meeting would seem to be a tone in the press-conference, which does not hint at a rate cut in December."