🇪🇺 On 11 June, the ECB is widely expected to raise its deposit rate by 25 basis points, from 2.00% to 2.25%, a move markets are pricing in with near certainty. The bank hasn't raised rates since September 2023. But traders should watch Lagarde, not the hike. A year ago the ECB was cutting rates as inflation looked tamed. Then energy prices surged: a geopolitical shock pushed eurozone inflation to 3.2% in May, well above the 2% target, with energy costs up nearly 11% year-on-year. The question now is whether ECB President Christine Lagarde will signal another move at the September meeting, and whether this is the start of a new hiking cycle or a one-off step. Will the ECB be heading towards Mont Blanc on rates, or does this cycle look more like a flat trail? 🏔️
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