ECB Set to Hike Deposit Rate Amid Persistent Inflation Risks
The European Central Bank (ECB) is expected to raise its deposit rate by 25 basis points (bps) to 2.50% in September, according to TD Securities' macro team.
Pooja Kumra and her team anticipate a cautious approach from the Governing Council, with limited forward guidance on future policy decisions.
The Middle East conflict remains fluid, with no resolution yet in sight, putting pressure on oil prices which are still below June's forecast levels. However, natural gas prices have increased significantly since then.
Natural gas prices for Q3 2026 are approximately 30% higher than the ECB's projections from June, despite a 15% decrease in oil prices during the same timeframe.