OCBC strategists maintain a September rate hike as their base case despite softer inflation and oil price declines.
OCBC strategists expect the European Central Bank to deliver one final rate hike in September, citing June meeting minutes that justified the latest increase while allowing policy flexibility. The outlook follows a sharp drop in oil prices and a downside surprise in June’s Consumer Price Index data.
The ECB’s June minutes reinforced the Governing Council’s stance that the hike was warranted based on available data, though future moves remain data-dependent. President Christine Lagarde’s recent comments have raised the possibility that June’s hike could be the last, adding uncertainty to the path ahead.
Markets are weighing the likelihood of a final hike against a potential pause, with inflation trends and energy prices key factors in the decision.