Eurozone Inflation Report Puts ECB Rate Hike in Focus

The European Central Bank (ECB) is closely watching the Eurozone Flash CPI report for September, which will provide insight into inflation rates. The headline Consumer Price Index (CPI) year-over-year (Y/Y) is expected to reach 2.9%, while Core Y/Y measure is seen at 2.4%. This data will help the ECB determine whether to raise interest rates in September, with a 68% chance of a rate hike priced into the market.

The ECB has signaled that it's ready to hike rates unless the inflation outlook improves significantly. With a low bar for a rate hike set by the ECB, better core inflation figures and a de-escalation in the Middle East conflict are what the bank is hoping for.