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Yet in Europe, sterling came under pressure after data showed Britain's high inflation rate fell unexpectedly in August, prompting speculation that the Bank of England could pause its historic run of interest rate hikes as soon as Thursday. Two-year Treasury yields were down 3.5 basis points in London trade at 5.07%, having risen sharply on Tuesday, when five- and 10-year Treasury yields reached 16-year highs. World stock markets were edging higher ahead of the Fed rate decision. UK gilt yields fell sharply as investors slashed bets for a rate hike on Thursday, with two-year yields last down over 14 bps at 4.85% . "Combined with their recent dovish commentary, we now expect the MPC to keep Bank Rate unchanged tomorrow and lower our forecast for the terminal policy rate to 5.25%," Stehn and co. added.

Persons: DAX, Kai Pfaffenbach, Jerome Powell, Lee Hardman, Sterling underperformed, Goldman Sachs, Sven Jari Stehn, Stehn, Masato Kanda, Eugene Low, Dhara Ranasinghe, Samuel Indyk, Tom Westbrook, Toby Chopra, Chizu Organizations: REUTERS, Sterling, U.S, Treasury, Federal Reserve, Bank of England, Brent, Federal, Fed, Japan's Nikkei, MPC, Monetary, Bank of, New Zealand, Thomson Locations: Frankfurt, Germany, Europe, Saudi Arabia, Russia, U.S, London, Sweden, Switzerland, Norway, Britain, Japan, Asia, Pacific, Hong Kong, China, Singapore

☆ Goldman Sachs cuts BoE terminal rate view to 5.5%
▼ + stars: | 2023-09-18 | by ( ) www.reuters.com time to read: +1 min

A general view of the Bank of England (BoE) building, the BoE confirmed to raise interest rates to 1.75%, in London, Britain, August 4, 2022. REUTERS/Maja Smiejkowska//File Photo Acquire Licensing RightsSept 18 (Reuters) - Goldman Sachs lowered its forecast for the Bank of England's (BoE) terminal rate by 25 basis points to 5.5%, after predicting that the central bank would hold interest rates steady at its November meeting against an earlier forecast of a hike. The BoE raised its key interest rate by a quarter of a percentage point to a 15-year peak of 5.25% in early August, its fourteenth back-to-back increase, and warned that borrowing costs were likely to stay elevated for some time. Economists led by Sven Jari Stehn said in a note dated Friday that they still expect the BoE to hike rates by 25 bps at its September Monetary Policy Committee (MPC) meeting next week. Reporting by Aniruddha Ghosh in BengaluruOur Standards: The Thomson Reuters Trust Principles.

Persons: BoE, Maja Smiejkowska, Goldman Sachs, Sven Jari Stehn, Aniruddha Ghosh Organizations: Bank of England, REUTERS, Bank of England's, MPC, Thomson Locations: London, Britain, Bengaluru

☆ UBS could see big gains after forced Credit Suisse merger. Big U.S. banks may also be winners, analysts say
▼ + stars: | 2023-03-20 | by ( Alex Harring | ) www.cnbc.com time to read: +5 min

UBS ' acquisition of Credit Suisse could lead to big gains for the Swiss bank. UBS agreed to buy Credit Suisse for 3 billion Swiss francs, or around $3.2 billion, in a forced deal announced Sunday. As part of the deal, Credit Suisse shareholders receive 1 UBS share for every 22.48 Credit Suisse shares they hold. But Barclays analyst Amit Goel wasn't so sure, cutting his view on European banks to neutral from positive on Monday. Wells Fargo's Mike Mayo, meanwhile, sees opportunity for U.S. banks coming out of the UBS takeover of Credit Suisse.

☆ Goldman Sachs, other banks expect smaller hike from ECB in May
▼ + stars: | 2023-03-17 | by ( Subhadeep Chakravarty | ) www.reuters.com time to read: +2 min

March 17 (Reuters) - Goldman Sachs, Morgan Stanley and at least two other banks expect the European Central Bank to deliver a smaller quarter-point hike in May, as it grapples with stress in the banking sector and high core inflation. Goldman's terminal rate forecast for the ECB now stands at 3.5%, down from 3.75% expected previously when it forecasted a 50-bps raise in May. For Morgan Stanley, a smaller May hike expectation leaves the peak rate forecast at 3.75% by July, down from 4% expected earlier. The changes in forecast follow the ECB's decision on Thursday to press ahead with a 50-bps hike in its deposit facility rate, taking it to 3%. Traders see the ECB rate peaking at around 3.23% by September or October.

☆ Goldman Sachs and other banks expect smaller hike from ECB in May
▼ + stars: | 2023-03-17 | by ( Subhadeep Chakravarty | ) www.reuters.com time to read: +2 min

March 17 (Reuters) - Goldman Sachs and two other banks expect the European Central Bank to deliver a smaller quarter-point hike in May as it grapples with stress in the banking sector and high core inflation. Goldman earlier expected the ECB to deliver a 50 bps hike in May. The Wall Street bank's terminal rate forecast now stands at 3.5%, down from 3.75% previously. Traders see the ECB rate peaking at around 3.23% by September or October. Meanwhile, J.P.Morgan, Deutsche Bank and Swedish Bank SEB expect the ECB to deliver a 50 bps hike in May but warned of downside risks to their forecasts given current market volatility and inflation remaining well above the central bank's target.

☆ Goldman Sachs cuts ECB rate hike forecast to 25bps in May
▼ + stars: | 2023-03-17 | by ( ) www.reuters.com time to read: +1 min

March 17 (Reuters) - Goldman Sachs lowered its estimate for an interest rate hike by the European Central Bank (ECB) in May to 25 basis points after the central bank raised rates to fight inflation amid calls to rein in policy tightening. The investment bank reduced its estimate from the earlier forecast of 50 bps, pushing its ECB terminal rate forecast to 3.5% from 3.75% previously. The revised forecast comes after the ECB raised interest rates by 50 bps on Thursday. The investment bank anticipates the ECB will continue to be in tightening mode despite volatility in financial markets and expects Europe's core inflation to remain firm in coming months. Reporting by Subhadeep Chakravarty; Editing by Sonia CheemaOur Standards: The Thomson Reuters Trust Principles.

☆ Goldman Sachs no longer expects recession in euro zone in 2023
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +2 min

[1/2] The euro sign is photographed in front of the former head quarter of the European Central Bank in Frankfurt, Germany, April 9, 2019. REUTERS/Kai PfaffenbachJan 10 (Reuters) - Goldman Sachs said on Tuesday it expects the euro zone economy to grow by 0.6% this year, compared with its previous forecast of a contraction, thanks to a fall in natural gas prices and the reopening of China's borders. Euro zone inflation is expected to be around 3.25% at the end of 2023 compared with 4.50% forecast earlier, the economists said. In December, consumer price growth across euro zone slowed to 9.2% from 10.1% a month earlier, Eurostat data showed last week. For the UK, Goldman sees a smaller contraction of 0.7% in GDP, compared with an earlier expectation for it to shrink by 1%, helped by lower wholesale gas prices.

☆ Goldman Sachs: Energy crisis will push euro zone into 'shallow' recession
▼ + stars: | 2022-11-23 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailGoldman Sachs: Energy crisis will push euro zone into 'shallow' recessionSven Jari Stehn, chief European economist at Goldman Sachs, says the energy crisis will push the euro zone into a "fairly shallow" recession next year. However, he adds that the region is "roughly" at peak inflation, with price rises expected to fall closer to 3% next year.

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