ECB to raise rates by 75 bps for third time in a row – Nordea

Economists at Nordea expect the European Central Bank (ECB) to raise key rates by 75 basis points for the third time in a row in December in a nod to the more hawkish voices in the Governing Council.

ECB to set broad guidelines for QT

"We think the ECB will postpone the decision on the starting date for reducing the huge bond holdings, or set the date for late Q2 or early Q3 2023, in a nod to the more dovish voices in the Governing Council."

"We think the ECB will set the broad guidelines for the reduction in bond holdings, or quantitative tightening (QT), including setting cap values for the amount of bonds allowed to mature each month, with the monthly cap initially set at EUR 10 to 20bn per month."

"We think the ECB will signal that while the central bank remains in a data-dependent mode, further hikes look likely and their magnitude is likely to moderate going forward."