Morgan Stanley Forecasts ECB Hikes in June, Flags €90/MWh Gas Spike
Morgan Stanley economists now expect ECB rate increases in June and September, while CIO Lisa Shalett places recession odds below 30%. MS warns of a 3% LNG supply shock from Qatar outages, forecasting a 15 Mt global deficit and TTF gas surging toward €90/MWh this summer.
1. Revised ECB Rate Projections
Morgan Stanley economists have shifted to expect the first quarter-point ECB rate increase on June 30 and a second in September, driven by hawkish policymaker messaging and rising inflation pressures amid geopolitical tensions.
2. Lowered Recession Odds
Chief Investment Officer Lisa Shalett assesses the probability of a global recession at under 30%, reflecting resilient consumer spending, strong labor market indicators and stable corporate credit conditions.
3. Gas Market Supply Shock
Morgan Stanley flagged a 3% global LNG supply shock after long-term damage to two mega-trains at Qatar’s Ras Laffan facility, forecasting a 15 Mt deficit in 2026 and projecting European TTF prices could rise to €90/MWh this summer without additional storage subsidies.