Markets Are Pricing Too Many ECB Rate Hikes, Yield Outlook Warns
A yield outlook argues markets have overpriced European Central Bank tightening, while US-Iran tensions and firmer energy prices keep inflation risks in focus.
Strategists in the latest yield outlook note that market pricing for European Central Bank rate hikes looks excessive. The view suggests current expectations may need to be trimmed if the growth and inflation picture does not support the hawkish path implied by rates.
Geopolitical risk has remained elevated over the summer, with little sign of reconciliation between the US and Iran. That backdrop has given energy prices renewed momentum, pushing oil toward the $90 area.
The combination leaves macro markets facing two opposing forces: hawkish central bank pricing on one side and persistent geopolitical and energy-driven inflation risks on the other.
Source: FXStreet Forex News