European Central Bank Expected to Hold Rates Amid Hawkish Hints

Markets are anticipating the European Central Bank (ECB) to maintain its current interest rates at the upcoming July 23 meeting, with over a 99% probability of no change. However, attention will be focused on President Christine Lagarde's post-meeting press conference for any hawkish signals. This comes as rising oil prices, influenced by geopolitical tensions, have complicated the disinflation trend since the ECB's last rate cut in June 2025. Analysts, including ING, suggest a 'hawkish-leaning hold,' indicating a potential for a September rate hike that is largely already priced into markets. Any hawkish commentary could bolster the euro and exert upward pressure on German Bund yields.