Factbox-Big banks add October cut to ECB forecasts

LONDON (Reuters) -Major brokerages, including Goldman Sachs and JPMorgan, now expect the European Central Bank to deliver a quarter-point cut at its Oct. 17 meeting, on the back of recent data showing economic weakness and slowing inflation.

Market pricing now reflects around a 90% chance of such a rate cut, which would follow reductions at the ECB’s June and September meetings, as the data pushes policy makers to focus more on growth and less on price pressures.

Euro zone inflation dipped below 2% for the first time since mid-2021 in September, according to Tuesday data, while last week surveys showed Euro zone business activity contracted sharply and unexpectedly in September, as the bloc’s dominant services industry flatlined and a downturn in manufacturing accelerated.

Sources told Reuters that ECB policy doves are preparing to fight for an October rate cut – though this would likely meet resistance from more conservative peers – a turnaround from the aftermath of the ECB’s September meeting when they saw an October move as unlikely.

Here are the latest forecasts from some brokerages.

Brokerage Oct ’24 rate Dec ’24 Terminal rate/end

cut estimate estimate ’25 forecast

(bps) (bps)

Goldman 25 25 2.0% (June 2025)

Sachs

HSBC 25 25 2.25% (April 2025)

BNP Paribas (OTC:BNPQY) 25 25 2.25% (end-2025

forecast)

RBC 25 25 2.25% (April 2025)

JPMorgan 25 25 2.0% (June 2025)

Barclays 25 25 2.0% (June 2025)

25 25 2.5%

TD (March 2025)

Securities

25 25 Close

Jefferies to 2.0% (end 2025)

25 2.0%-2.5%

Deutsche 25 (mid-2025)

Bank

2.5%

Commerzbank (ETR:CBKG) 25 25 (June 2025)

1.5%

Bank of 25 25 (end-2025)

America

1.75%

Nomura 25 25 (September 2025)

2.0%

SEB 25 25 (June 2025)

Citi – 25 Likely

under 2.0%

UBS IB – 25 2.25% (end-2025

forecast)

ING – 25 2.25% (end 2025

forecast)

BBVA (BME:BBVA) – 25 2.75% (November

2025)