ECB Pauses July Decision: Focus on Data for September Hike

The European Central Bank (ECB) maintained its interest rates unchanged in the latest meeting in July, a move that aligns with Deutsche's expectations. The bank is expected to take a pause before delivering its final rate hike in September. This decision comes after June inflation data proved softer than anticipated but still provided enough evidence for a short-term pause. Deutsche’s analysis suggests that current oil prices below levels seen on 11th June, combined with softer-than-expected June HICP data, offer an opportune time to assess the indirect inflationary pressures. During the upcoming press conference, President Christine Lagarde is expected to maintain a neutral communication approach, emphasizing the data-dependent and meeting-by-meeting approach without committing to specific policy paths. This cautious stance reflects a balance between combatting inflation and supporting economic growth.