📝 Expect ECB Terminal Rate At 3.5% In June: Nomura

The ECB is likely moving cautiously given increasing govemment issuance, risk of widening periphery sovereign spreads Bxpects QT to begin April 2023, and in modest way by allowing one-third of APP portfolio redemptions to be rolled off.

Expect 100bp of additional rate hikes next year, giving terminal rate of 3.5% in June vs previously forecast 2.5% in February inflation has broadened into core measures and looking 'stickier; ECB Governing council members starting to focus more on core inflation Sees prospect of stronger European government fiscal support to address cost of living crisis will put upward pressure on underlying inflation.

- Nomura