ECB returns to tightening, and published research broadly sees more hikes ahead.
The week's dominant theme: the ECB delivered a 25bp hike across all three policy rates, with President Lagarde flagging that inflation pressures — amplified by Middle East energy shocks — are broadening beyond a single category. Multiple research desks read her tone as hawkish and expect at least one more 25bp move, most likely in September, with some analysts warning a sustained move in Brent above $100 could force a third hike.
On rates, the consensus view sees eurozone 10-year yields hovering near 3% and biased modestly higher in the near term, with German Bund yields drifting up as inflation stays above target into 2027. Several analysts nonetheless called intermediate Bunds attractive for long-term investors, and flagged strategic overweights in Spain and Greece versus core peers.
A contrarian thread argued the hiking cycle will be short and largely symbolic, with cuts plausible in 2027 once the energy shock fades and growth weakens.