ECB Hike Looms Amid Ongoing Oil Price Surge

The European Central Bank (ECB) is set to hike interest rates for the second time this year, taking the deposit rate to 2.5% from 2.25%. This decision comes as inflation in the eurozone reached 3.3% in August, with energy inflation surging 14.3%, and oil prices remaining above $100 a barrel.

The market sees potential for two more rate hikes before Q3 next year, which could weigh on European equities due to elevated bond yields already tightening financial conditions.

According to technical analysis, the DAX has found support at 25,500, but bears will look to break below 25,400 to expose the 100 EMA at 25,300. Oil prices have continued to surge, breaking out of its triangle pattern and rising above a key resistance area to a four-month high of 97.70.