ECB Rate Hike on Tap as Oil Prices Soar Above $100

European markets are bracing for a rate hike from the European Central Bank (ECB), led by President Christine Lagarde, as investors come to terms with a new normal of elevated bond yields and higher oil prices.

The conflict in the Middle East is escalating, with attacks on shipping at their highest level in six months. Brent crude futures have surpassed $100 a barrel for the first time since July, while long-term bond yields are at highs not seen since before the global financial crisis.

Despite this toxic mix, European stock futures point to a muted open, and the euro remains steady at $1.1637 ahead of the ECB's decision. Meanwhile, the yen is trading strong at 153.39 per dollar, up 4% this month, as traders anticipate a faster pace of rate hikes from the Bank of Japan.

The upcoming central bank meetings will be closely watched, particularly the Fed's September 15-16 meeting, where analysts expect data on U.S. producer prices and consumer price inflation to play a key role in determining whether interest rates are hiked.