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6/18, 2:55 PM (Source: TeleTrader)
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Danske Bank expects ECB to cut rates by 20bp

Denmark's largest financial institution Danske Bank on Tuesday changed its European Central Bank (ECB) outlook, saying it now expects a rate cut between ten to 20 basis points, an introduction of a tiering system, further extension of the forward guidance, or the restart of the quantitative easing as early as September.

In its analysis, Danske Bank referred to the statement made by the European Central Bank President Mario Draghi, who indicated action due to underwhelming eurozone economic data.

"We expect ECB to open for further easing in the July meeting, and announcement in September, alongside new staff projections, but also acknowledge a risk to earlier announcement should market and economic sentiment suffer," Danske Bank concluded, adding that a rate cut will probably be used as a primary tool. On the other hand, the assessment puts the quantitative easing projections for one year at a monthly pace of €45-60 billion per month.

Breaking the News / MA