ECB the main event on the agenda in Europe today

<p>After the supposed leak early in the week, it looks likely that the ECB will lean towards raising interest rates one last time <a href="https://www.forexlive.com/news/the-ecb-will-have-to-sell-a-hawkish-pause-if-they-do-not-hike-this-week-but-can-they-20230912/" target="_blank" rel="follow">before they miss the boat</a>. That being said, the odds of a 25 bps rate hike are now at ~63% so it is not exactly too convincing but at least a considerable shift compared to last week when it was flipped in favour of there being no change.</p><p>It's still a tight call and the euro currency will be a main focus point as such alongside regional bond yields. But even if the ECB does manage to hike, I reckon markets will take it as the final one that they can get away with. In that case, there could be limited upside reaction especially if there are downside revisions to the economic projections.</p><p>To solidify a rate hike, the ECB should raise their inflation estimates but if it is to end up being a one more and done rate hike scenario, lower growth estimates are likely to take more weightage. That will help to make a case for the ECB pausing but if economic data continues to falter as it has in the last few months, rate cuts may start to come into the picture sooner rather than later. And that is no matter what policymakers might try to say or deny.</p><p>Anyway, until we get to the ECB later today, it could be a quieter session with little else to work with. There is also going to be a slew of major US data to come so it is all about more waiting for now.</p><p>0630 GMT – Switzerland August producer and import prices1215 GMT – ECB announces September monetary policy decision1245 GMT – ECB president Lagarde press conference</p><p>That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.</p>

This article was written by Justin Low at www.forexlive.com.