ECB Set to Raise Interest Rates Amid Strong Eurozone Growth

Elias Haddad, an analyst at Brown Brothers Harriman (BBH), expects the European Central Bank (ECB) to raise interest rates by another 25 basis points this week. The move would bring the policy rate to 2.50%. This decision is supported by above-target Eurozone inflation and a firmer growth outlook.

According to Haddad, the swaps curve already prices in ECB rates at 3.00% over the next twelve months, which he sees as a sign that the macro backdrop supports the euro.

The ECB will also publish its September macroeconomic projections this week, but Haddad does not expect any material changes to the Eurozone GDP and inflation forecasts.