Oliver Mangan: ECB meeting in late July could well deliver an interest rate hike

ECB president Christine Lagarde has indicated that rate increases will depend on incoming data and the ECB’s evolving outlook for the economy and inflation. 

The initial view of markets was that the Russian invasion of Ukraine would greatly reduce the likelihood of an ECB rate hike this year. However, there has since been a remarkable hardening of eurozone interest rate futures contracts. 

Indeed, in a complete somersault, markets now expect at least three rate hikes of 25 basis points before the year is out, possibly starting as early as July. The three-month futures contract for July has firmed by 25 basis points since early March.