ECB Seen Hiking Interest Rates Amid Energy Price Surge

The European Central Bank (ECB) is widely expected to raise interest rates for the second time this year on Thursday, driven by surging energy prices due to the ongoing US-Iran conflict.

Alessia Berardi, head of global macroeconomics at the Amundi Investment Institute, believes that a September hike looks 'all but locked in' as inflation remains elevated and is expected to stay sticky over the next few months before easing toward the second half of next year.

The ECB's decision will be closely watched by traders, who are also monitoring US PPI data on Thursday for clues about the US interest rate path. The headline PPI is expected to show a rise of 5.3% YoY in August, versus 4.7% prior.