๐ Two heavyweight releases land today, both shaped by the same Middle East energyย shock.
๐ช๐บ ๐๐๐: A 25 bp hike to the 2.50% deposit rate is priced in as close to certain, after eurozone inflation hit 3.3% y/y in August (energy +14.3%) on the Iran war shock. The real question is guidanceโโโsome banks still expect a December follow-up hike, others see 2.50% as the peak. A hawkish tone could push EUR/USD toward 1.17; a dovish hike could send it lower fast.ย ๐ฏ
๐บ๐ธ ๐จ๐ฆ ๐ฃ๐ฃ๐: August data lands just before tomorrowโs CPI, an unusual order that gives it extra weight this week. Consensus looks for both headline and core PPI to accelerate y/yโโโheadline toward 5% from 4.7%, core toward 4.6% from 4.2%โโโas energy costs work through the pipeline. That feeds straight into Fed odds: markets currently price roughly 50โ60% chance of a 25 bp hike at the September 15โ16 FOMC, from the current 3.50%-3.75% range.ย ๐ฅ
๐ฑ Ahead of the releases: EUR/USD sits near 1.1635โ1.1640, US 10-year yields near 4.84% (multi-year highs), Bund yields near 3.43% (15-year highs). ๐ฅ Gold holds near $4,400โ4,415, caught between rising real yields and safe-haven demand from theย war.
๐๐ผ๐๐๐ผ๐บ ๐น๐ถ๐ป๐ฒ: todayโs two releases decide whether the ECB and Fed diverge in paceโโโand that gap sets the tone for EUR/USD, Bund/Treasury spreads and gold into next weekโs Fedย meeting.
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๐ช๐บโ๏ธ๐บ๐ธ ECB Decision + US PPI: Can Europe and the US Reprice Rates in Opposite Directions? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
