European Central Bank: Oil risks support a September rate hike – Commerzbank
By FXStreet Insights Team
Updated: 20 Jul 2026
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Commerzbank’s rates team expects higher oil prices and weak growth signals to shape Thursday’s European Central Bank (ECB) meeting. A July rate hike is effectively ruled out, while markets have fully priced in another 25bp move in September.
Commerzbank’s rates team expects higher oil prices and weak growth signals to shape Thursday’s European Central Bank (ECB) meeting. A July rate hike is effectively ruled out, while markets have fully priced in another 25bp move in September. Lagarde is expected to emphasise inflation risks without pre-committing, as Friday’s flash euro area PMIs may show that the recovery remains fragile.
September hike seen but not pre-committed
"The ECB will be this week's highlight on Thursday, followed by the Fed decision next week."
"Rate hikes can be confidently ruled out this month."
"However, bouncing oil prices leave another ECB rate hike in the offing for September, which is also fully priced in (+24bp)."
"While Lagarde is likely to strike a firm tone with regard to inflation risks she is unlikely to pre-commit to the September hike, as the situation remains in flux amid rising headwinds to growth."
"This week's data is likely to signal that economic recovery remains distant."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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