Poll shows analysts split on an ECB rate hike next week

<p>Reuters polling on what's expected from the European Central Bank at its September 14 meeting:</p><ul><li>39 of 69 analysts/economists say the ECB will leave its Deposit Rate unchanged at 3.75%</li><li>30 said the ECB will hike it by 25bps to 4.00%</li></ul><p>This compares with market p[pricing of around 65% for an on-hold decision at this meeting.</p><p>Further out:</p><ul><li>36 of 69 forecast the key interest rate to end the year at
3.75%</li><li>33 said 4.00%</li></ul><p>Some of the remarks from the Reuters piece:</p><ul><li> "Officially, we are expecting the ECB will stay on the
sidelines for the rest of the year, but right now, it is almost
like a 50-50 coin toss," said Jennifer Lee, senior economist at
BMO Capital Markets, adding there was not much clarity from the
inflation data since the ECB last met.
"We were all excited looking for the next couple of
inflation reports and always thinking for sure they are going to
tell us what they (policymakers) are going to be doing in
September, but both inflation reports have been of zero help."
</li><li>"The real economy is weaker than expected and inflation is
retreating as expected. Hence, the ECB can stay on hold and
watch," said Luca Mezzomo, head of macroeconomic analysis at
Intesa Sanpaolo.
"If it is just a soft spot, they will raise the key rates
again. If instead it is the beginning of a deeper and more
persistent slowdown, there will be no more hikes." </li></ul><p>In contrast, Ueda doesn't hike. He struts. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.