ECB December hike moves to center stage — researchers nearly unanimous that Lagarde's "direction of travel" line locks in a 25bp move.
Most published notes this week read the ECB's October hold as a pause before action, with the deposit rate seen rising from 2.50% to 2.75% in December. Several analysts expect a follow-up in March to around 3%, flagging euro area inflation drifting toward 4% on energy, with TTF gas above €100/MWh raising second-round risks. Market pricing cited in the research puts roughly 70–80bp of further tightening on the curve. A contrarian thread argued the hikes are a policy mistake Europe will unwind within a year, and one outlook sees yields falling into 2027 as tighter financing bites.
France remained the soft spot. Commentary pointed to the OAT-Bund spread near 147–155bp, with warnings that French yields could climb another ~100bp before the ECB's TPI backstop is seriously discussed. French bank AT1s are flagged as most exposed to the sovereign-bank loop ahead of a late-November ratings review.