Morgan Stanley has changed their forecast for the ECB. Analysts at the bank were expecting an ECB rate hike at the September ECB meeting but now says the rate hike cycle is over.
Morgan Stanley cite data showing services inflation slowing in the euro area (drop in August services inflation to 5.5% from 5.6%), and also signs of a quickly deteriorating economy. This will see ECB policymakers pause at this month's meeting. MS had previously been expecting a hike at this meeting to be the ECB's last, but says now the hiking cycle is over, the terminal rate has been reached at 3.75%'
- “We change our ECB call and expect a pause in September”
The ECB meet September 14.
