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Markets price growing odds ECB will hike rates to 3% by late 2027

Money markets are increasingly wagering on a hawkish European Central Bank, with traders pricing a growing chance that the deposit rate could reach 3% by late 2027 as the U.S.-Iran war sustains energy-driven inflation pressures across the euro zone.

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Euro-area inflation expectations, wage growth both cool as ECB weighs next hike

Euro-area consumers lowered their inflation expectations in July while negotiated wage growth decelerated in the second quarter, giving the European Central Bank a pair of data points that support its disinflationary narrative even as geopolitical risks keep rate-hike bets alive.

Eurozone business activity hits 2026 high as manufacturing surges

Private-sector business activity in the eurozone unexpectedly improved in August, reaching its fastest pace since November, as the manufacturing sector delivered its strongest expansion in more than four years despite headwinds from the Middle East conflict and elevated energy costs.

Markets price in ECB rate hike for September as inflation pressures build

Financial markets are now broadly pricing in a 25 basis point rate increase from the European Central Bank at its September 10 meeting, which would bring the deposit rate to 2.50%. The euro traded in a narrow range on Thursday,…

ECB and Fed both warn AI stock valuations risk dot-com-style correction

Central banks on both sides of the Atlantic are raising alarms about the sustainability of the AI-fueled stock market rally, with the European Central Bank warning that a correction is "likely" and the Federal Reserve flagging valuations approaching dot-com bubble…

Euro hits 2.5-month high as US Treasury ramps up bond buybacks

The euro climbed to a 2.5-month high against the dollar on Wednesday, gaining more than 0.8% as the U.S. Treasury's announcement of expanded bond buyback operations overshadowed hawkish Federal Reserve minutes. EUR/USD pushed toward the 1.17 level, driven by falling…

Europe’s post-summer bond sales hit record pace as yields reach multi-year highs

European bond markets roared back to life this week at the fastest post-summer pace on record, even as a broader selloff in government debt pushed yields to multi-year highs across the continent.

Eurozone inflation hit 2.9% in July as energy costs surged

Final data released Wednesday confirmed that Eurozone annual inflation accelerated to 2.9% in July 2026, matching flash estimates and rising from 2.8% in June, as a renewed surge in energy prices linked to resumed US-Iran hostilities kept price pressures well…

European stocks flat near two-week lows as bond yields hit multiyear highs

European equities traded sideways on Wednesday, struggling to recover after their steepest single-day decline in nearly a month as surging bond yields and escalating Middle East tensions kept investors on the defensive ahead of the release of minutes from the…

SpaceX-led IPO boom triples global proceeds as ECB warns of tech correction

Global initial public offering proceeds tripled in the first half of 2026 compared with a year earlier, fueled by SpaceX's record-shattering Nasdaq debut in June — the largest IPO in history. The boom has deepened the concentration of capital in…

ECB’s Lane warns inflation to stay near 3% for rest of 2026

European Central Bank Chief Economist Philip Lane said on Tuesday that eurozone inflation is likely to remain "well above" the ECB's 2% target for the rest of 2026, hovering around 3%, as the fallout from the Iran war continues to…

EU bankruptcies jumped in Q2 as business registrations fell

Business bankruptcy declarations across the European Union rose 5.7% in the second quarter of 2026 compared with the first quarter, while new business registrations edged down 0.5%, according to data published by Eurostat on Sunday. The figures point to mounting…

ECB warns surging defence spending could stoke inflation across eurozone

European Central Bank Chief Economist Philip R. Lane warned on Monday that the euro area's rapid defence build-up could push up long-term borrowing costs and stoke inflation, as military spending across the 27-member European Union reached €418 billion in 2025…

Euro zone bond yields hover near 15-year highs on Iran war inflation fears

Euro zone government bond yields remained near their highest levels in more than 15 years on Monday as investors weighed the risk that a prolonged war in Iran could keep energy prices elevated and reignite inflation across the bloc.

Reuters poll: 83% of economists expect ECB rate hike in September

The European Central Bank is on course to raise interest rates by a quarter point next month, completing what would be its shortest tightening cycle since 2011, as elevated energy prices from the prolonged U.S.-Iran conflict keep inflation well above…

Euro trades near 2-month highs as ECB rate hike looms

The euro has been trading around $1.15 in August, hovering near two-month highs, after the eurozone economy posted its strongest quarterly expansion since early 2025 and markets increasingly priced in another rate hike from the European Central Bank in September.

ECB leans toward approving UniCredit’s Commerzbank bid

The European Central Bank is leaning toward approving UniCredit SpA's takeover of Germany's Commerzbank, according to an internal document reported exclusively by Reuters on Wednesday, in what would clear the main regulatory hurdle for the largest EU banking deal since…

Euro weakens as US-Iran stalemate lifts oil prices

The Euro slid against major currencies on Tuesday as the collapse of momentum in US-Iran peace negotiations sent oil prices higher, compounding inflationary pressures on energy-dependent Eurozone economies and raising the prospect of further interest rate increases from the European…

European energy stocks surge as Mideast tensions drive oil to monthly highs

European shares edged higher on Tuesday as energy stocks rallied on elevated oil prices driven by ongoing Middle East uncertainty, even as broader markets remained cautious ahead of key economic data later this week.

Eurozone GDP doubles forecasts, lifting ECB rate hike odds

The Eurozone economy grew by 0.4% quarter-on-quarter in the second quarter of 2026, double the median forecast of 0.2% and the fastest pace of expansion in nearly two years, bolstering expectations that the European Central Bank will raise interest rates…

Revolut wins French banking license for Western Europe push

Revolut secured a full French banking license on Monday following joint approval from France's Prudential Supervision and Resolution Authority (ACPR) and the European Central Bank, giving the British fintech a second standalone banking license within the eurozone.

Eurozone retail sales fall unexpectedly in June

Retail sales across the eurozone fell unexpectedly in June, marking the second monthly decline in three months and underscoring persistent weakness in consumer spending as the bloc contends with elevated interest rates and geopolitical uncertainty.

Germany weighs Nagel nomination as ECB succession race narrows

The contest to lead the European Central Bank entered a new phase this week as the Netherlands officially endorsed former Dutch central bank chief Klaas Knot for the presidency, while Germany's government began coalition discussions about nominating Bundesbank President Joachim…

Euro zone bond yields fall as oil tumbles on Iran talks

Euro zone government bond yields declined on Monday as oil prices tumbled following U.S. President Donald Trump's comments that negotiations with Iran were set to begin, raising hopes of a diplomatic resolution to the conflict that has disrupted energy supplies…

ECB September rate hike seen as ‘done deal’ despite Iran war fallout

Swap markets are pricing roughly a 90% chance that the European Central Bank will raise interest rates by 25 basis points at its September meeting, as stronger-than-expected eurozone growth and persistent inflation override concerns about the economic fallout from the…

ECB says Iran war hit eurozone spending harder than expected

Euro-zone household consumption fell sharply in the early weeks of the Iran war, with the decline driven primarily by uncertainty rather than inflation, according to research published Monday in the European Central Bank's economic bulletin.

ECB stress test finds some banks could breach liquidity limits in geopolitical crises

The European Central Bank on Friday published the results of a first-of-its-kind reverse stress test focused on geopolitical risks, finding that some euro zone banks could breach foreign-currency liquidity requirements under severe scenarios such as military conflicts or cyberattacks.

Euro zone inflation rises to 2.9% in July, reinforcing ECB rate hike expectations

Consumer prices across the euro zone ticked higher in July, with inflation climbing to 2.9% from 2.8% in June, as war-driven energy costs pushed headline figures back up and reinforced expectations that the European Central Bank will raise interest rates…

French inflation unexpectedly jumps, bolstering ECB rate hike case

France's annual inflation rate rose to 2.1% in July 2026, defying market expectations that it would hold steady at 1.8%, according to preliminary estimates from statistics agency INSEE released on Friday. The EU-harmonised rate jumped to 2.4% from 2.0% in…

ECB credits China’s oil stockpiling for cushioning Iran war energy shock

Economists at the European Central Bank published a blog post on Monday arguing that China's pre-war oil stockpiling, rapid adoption of electric vehicles, and reduced petrochemical consumption have played a central role in limiting the global economic fallout from the…