Gas Prices and Inflation Rise All but Guarantee ECB Hike
Dow Jones
2 hours ago
1122 GMT - The continued climb in gas prices amid escalating U.S.-Iran tensions and the increase in eurozone inflation to 3.3% in August cement a September rate hike from the European Central Bank, Ebury's Matthew Ryan says. Even so, a passthrough from the energy spike to underlying inflation was still conspicuously absent in August's data, he says. Core inflation declined to 2.4% from 2.5% in July, returning to its February level before the start of the Iran war. "While a September hike looks all but guaranteed, further tightening into restrictive territory beyond that is far from certain." That could keep a lid on further appreciation of the euro against the dollar, particularly given how aggressively markets are currently pricing in additional hikes, Ryan says.
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