Overview
- The European Central Bank left its deposit rate at 2.25% on Thursday and said it is closely watching the recent energy shock for intensity, duration and indirect effects.
- Renewed Middle East fighting and Houthi attacks on tankers have pushed Brent crude back toward $98–$100 a barrel and raised the risk of higher consumer fuel costs in Europe and beyond.
- Markets sharply repriced policy expectations, with traders raising the chance of further ECB hikes this year and Fed futures showing a much higher probability of a September move.
- Domestic data are complicating choices for other central banks: Australia’s surprise 76,300 job gain in June has pushed investors to expect the RBA may need to raise rates again.
- Policymakers say there is little sign so far of second‑round effects — meaning broad wage‑price spirals have not emerged — so the next monetary steps will depend on incoming inflation and labour data.