Markets are pricing in no change from the European Central Bank at next Thursday’s rate decision, after a 25-basis-point hike in June. Scotiabank said policy does not need to move in a straight line, especially during periods of elevated uncertainty, framing the current pause expectation around the ECB’s policy path. ECB President Christine Lagarde said on July 1 that upside risks to inflation and downside risks to growth may be more balanced than they were a few weeks earlier. Since then, the conflict between the United States and Iran has flared up again, with both WTI and Brent crude rising by about $12 per barrel. On the data side, eurozone headline CPI for June fell 0.1% month over month, while core CPI eased to 2.4% year over year from 2.6%. Those figures are part of the backdrop for expectations that the ECB will leave its deposit rate unchanged at 2.25%.
Odaily reported that markets expect the European Central Bank to leave its deposit rate unchanged at 2.25% at next Thursday’s policy meeting, following a 25-basis-point hike in June.
Scotiabank said policy adjustments do not have to follow a straight line, especially in periods of elevated uncertainty.
ECB President Christine Lagarde said on July 1 that upside risks to inflation and downside risks to growth may be more balanced than they were a few weeks earlier.
Since then, the conflict between the United States and Iran has erupted again, and both WTI and Brent crude have climbed by about $12 per barrel. In June, eurozone headline CPI fell 0.1% month over month, while core CPI slowed to 2.4% year over year from 2.6%.
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