ICYMI - Nomura ramped their ECB peak rate forecast to 4.25% from 3.5% previously

From Nomura on the European Central Bank European Central Bank The European Central Bank (ECB) represents the central banking entity in the Eurozone that oversees monetary policy for the bloc. As a growing geographic and economic region, the eurozone now includes 19 countries, which rely on the euro as their national currency.The eurozone presently consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.In terms of monetary The European Central Bank (ECB) represents the central banking entity in the Eurozone that oversees monetary policy for the bloc. As a growing geographic and economic region, the eurozone now includes 19 countries, which rely on the euro as their national currency.The eurozone presently consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.In terms of monetary Read this Term:

• We have raised the forecast for the ECB terminal rate to 4.25% by July from 3.50% previously

From the note, in very brief.

Nomura reasoning includes

• the climbing core CPI Core CPI Core Consumer Price Index (CPI) is a measure of inflation that excludes certain volatile items, and that's almost always food and energy prices. The idea behind using core CPI is that these items can have large fluctuations in prices due to factors such as weather, natural disasters and geopolitical tensions, which do not necessarily reflect underlying inflationary trends. By excluding these items, the core CPI provides a more stable and reliable measure of underlying inflation.The specific item Core Consumer Price Index (CPI) is a measure of inflation that excludes certain volatile items, and that's almost always food and energy prices. The idea behind using core CPI is that these items can have large fluctuations in prices due to factors such as weather, natural disasters and geopolitical tensions, which do not necessarily reflect underlying inflationary trends. By excluding these items, the core CPI provides a more stable and reliable measure of underlying inflation.The specific item Read this Term rate in the eurozone
• resilient economic growth
• signals now from policymakers that rates rising to 4% is reasonable

Nomura projects the path ahead as:

• 50bp hikes in March, May and June this year
• then a 25bp hike in July

Which takes the peak to 4.25%. And for the rate to hold through to late 2024. Analysts at the bank expect rate cuts from the ECB to begin late in 2024.

The cycle so far from the ECB:

The next rate rise will be at the March 16 meeting. A +50bp rate is basically a done deal and widely expected.