For some context, Deutsche had previously pinned the ECB to cut rates next in September while seeing a terminal rate of 1.50%. However, they did note before this that "the risks against our long-held 1.50% baseline have been building" and that there are "non-negligible risks that the ECB easing cycle stops at 1.75% or even 2.00%".
So, that seems to be what is taking place here. Deutsche now sees a rate hike as the ECB's next move but that will only come at the end of 2026.
