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Euro ECB hike odds seen limited for October as policy set to wait

Standard Chartered expects the ECB to pause, citing only a slight rise in core inflation since January and risks from higher yields to both growth and inflation.

Reported · Written up by our desk · Central Banks

Standard Chartered Global Research said the odds of an October rate hike from the European Central Bank appear limited, arguing that core inflation has only edged up slightly since January.

The team also pointed to higher yields as a downside risk for both Euro area growth and inflation, reducing confidence in near term tightening.

Because of those factors, Standard Chartered expects the ECB Governing Council to wait for new macroeconomic projections at the December policy meeting.

In FXStreet coverage, the discussion also notes the broader market context for EUR sentiment, including AUD support from renewed expectations for a November rate hike amid elevated global yields.

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