Lagarde's Comments Spark Rate Hike Bets for European Central Bank

Commerzbank analysts believe that European Central Bank (ECB) President Lagarde has left the door open for a rate hike in September. The ECB's baseline scenario is still on track, with current conditions matching its expectations.

Lagarde highlighted that inflation risks are pointing upwards again, and some Council members have already discussed the possibility of hiking rates as early as this week. This subtle shift in tone has kept tightening expectations alive.

However, sources suggest that the inflation outlook would need to improve markedly to prevent a September hike, which seems like an uphill struggle given current oil price dynamics.