Commerzbank expects the ECB to raise rates next month amid sticky inflation near 3% and rising core pressures.
The European Central Bank is likely to hold rates steady today but signal a hike to 2.50% in September as inflation remains near 3% and core pressures show signs of rising. Markets have already priced in the move, limiting potential upside for the EUR unless Lagarde delivers a hawkish surprise.
Inflation trends and updated ECB forecasts in September will guide the decision, with energy price declines failing to offset persistent price pressures. Core inflation may even edge higher in the coming months, reinforcing the case for further tightening.
The EUR may see limited gains from today’s meeting, as the expected September hike is already reflected in market expectations. A surprise shift in Lagarde’s tone could alter the outlook.