16.12.2022 -
Ausgewählte Statements
Mit der Leitzinserhöhung um 50 Basispunkte auf zwei Prozent beabsichtigt die EZB, die Zinssätze in den restriktiven Bereich zu bringen und den Kurs zu halten.“
„Wir gehen nun davon aus, dass die EZB den Leitzins jeweils um 50 Basispunkte auf ihren Sitzungen im Februar und März anhebt, gefolgt von einer Zinserhöhung um 25 Basispunkte im Mai auf 3,25 Prozent.“
„Die wirtschaftlichen Bedingungen haben sich seit September verschlechtert, die Rezession dürfte jedoch nur geringfügig sein. Die EZB senkte ihre vierteljährliche BIP-Wachstumsprognose für das vierte Quartal 2022 auf -0,2 Prozent und das erste Quartal 2023 auf -0,1 Prozent.“
„In unseren Prognosen bleiben wir vorsichtig, weil die Gasprobleme nicht vollständig gelöst sind, die Finanzierungsbedingungen angespannt bleiben und die Unternehmen mit den immer noch sehr hohen Energiepreisen zu kämpfen haben werden.“
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ECB – As hawkish as it gets
- ECB GC decided to raise the three key ECB interest rates by 50bps in December, bringing the depo rate to 2.0%, as widely expected.
- ECB GC tone was resolutely hawkish, intending to get interest rates into restrictive territory, having “more ground to cover” than previously expected, and “stay the course”.
- This comes in a context of a sharp upward revision of inflation forecasts. Crucially, both 2025 headline and core inflation forecasts are well above the 2% target.
- We add 75bps worth rate hikes to our baseline scenario in H1 23. We now forecast ECB to raise its depo rate by 50bps at its February and March meetings (instead of +25bps for both) followed by a 25bps rate hikes in May to 3.25%. Risk is to the upside with another +25bps hike in June.
ECB Governing Council (GC) decided to raise the three key ECB interest rates by 50bps in December, bringing the DFR (Deposit Facility Rate) and main refinancing rate to 2.0% and 2.5% respectively, as we and market widely expected. The GC continues to be wary about inflation being "far too high and stay above target for too long ", risking a persistent upward shift in inflation expectation.
The GC stepped up its hawkish narrative, in line with our expectations, such that DFR will likely move straight into restrictive territory, without a pause at levels previously mentioned as neutral. Interest rate “will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target”. In turn, the GC dialed back into “dampening demand” narrative from “reducing support for demand” at the previous meeting. This is consistent with upward revisions in headline and core inflation and crucially 2025 forecast well above 2% at 2.3% and 2.4% respectively. As such, long gone already are the days when the ECB was concerned about transmission lags, and past tightening which were the key new additions of the guidance on rates introduced at the October meeting.
GC already went concrete on unwinding APP portfolio, more than we expected. Unsurprisingly interest rates are to remain primary tool to fight against above target inflation in the medium run. President Lagarde specified during the press conference that unwind of APP portfolio should not provide an indication of “policy stance”. Asset Purchase Programme holdings (APP) will decline from March at a measured and predictable pace: €15bn per month until the end of Q2 - roughly 50% of assets will not be reinvested - a bit more aggressive than our baseline at €10bn from April, €20bn from July, €30bn from October. Pace after that will likely be determined at the June meeting, benefitting from a full Eurosystem forecast update.
Very large upside inflation forecast revision. The ECB upgraded headline HICP forecasts to 6.3% y/y (+0.8ppts) in 2023 and 3.4% (+1.1ppts) in 2024 from September. Headline is to be boosted by core inflation projected to average 4.2% y/y in 2023 (+0.8ppts) and 2.8% in 2024 (+0.5ppts). This is mostly driven by higher and still incomplete passthrough from past energy rises and robust labor market. It is worth noting passthrough from compensation per employee to core seems very strong (+0.5pp upside revision in 2022 and +0.4pp in 2023 for compensation and +0.8pp for core). Policy signal is clear from 2025 forecasts with HICP forecast projected at 2.3% y/y (core: 2.4%). It is a detail but the fact that assumptions have been made by national central banks (rather than ECB staff) may have skewed the revised figures on the high side, in particular those coming from the Bundesbank.
The ECB downgraded its quarterly GDP growth forecast for Q4 and Q1 23 to -0.2% q/q and -0.1%, acknowledging current economic conditions have worsened since September, though recession should be shallow. Despite being closer to our own projections (-0.6% q/q and -0.4%, with upside risks), rest of the horizon is too optimistic. The ECB adjusted the strength of the rebound but maintained GDP growth above potential from Q3 23. We are much more cautious as we believe some headwinds will persist with gas issues not entirely solved, financing conditions will remain tight while companies will have to deal with still very high energy prices and less fiscal policy support.
We add 75bps worth of rate hikes to our baseline scenario in H1 2023, projecting ECB depo rate to reach 3.25% by June 2023, with upside risks. During the press conference, ECB President Lagarde explained that a “significant” increase in interest rate “at steady pace” should be understood at 50bps clips. We convert our +25bps hikes foreseen in February and March to +50bps, until the next forecast update. While it cannot be ruled out given the upside inflation risks (to the ECB but also to our forecasts), 75bps rate hike clips seems behind us. Indeed, we forecast only a slow decline in core inflation from 5.0% y/y in Q4 22 to 4.7% y/y in Q1. Reassured of a decelerating pace of core inflation, and with rates well into restrictive territory (3.0%), ECB is likely to slow down rate hike increase to +25bps in May, leaving the depo rate at 3.25%, slightly above market expectations at the time of writing. Risks to this forecast are skewed to the upside, relating to the combined stickiness of core inflation, tightness of the labour market, and corresponding wage developments.
Market is not really listening. We had flagged the market was too complacent vis-à-vis recent central bank communications and ECB meeting today reminded us expected pivot should not be expected. 10-year Bund rose by +15bps since the release of the statement, BTP-Bund spread reached a peak at 209 bps (+20bps), Eurostoxx 100 declined by 2% since 2.15pm (not helped by an important drawdown on the US market). EURUSD touched a high at 1.07 but is now stabilizing around 1.064.