ECB: See you in September

Unsurprisingly, the ECB left its rates unchanged, hinting that anything was still possible in September. The markets’ view (with a probability of 80%), and ours, is that Christine Lagarde will cut key rates on 12 September, but will not make any commitments ahead of the decision given the numerous inflation figures expected between now and then (CPI, Q2 wages). In addition to the Jackson Hole Summit in mid-August, we will have to keep a close eye on these figures, as well as those from the US, where the Fed is becoming increasingly dovish. There won’t be much of a summer break in this context!