• ECB-speak has swung violently from closing the door on another rate hike to the current vigilant stance that points to a hike in September. The cause for the ECB’s change of heart is obvious: the US and Iran are at loggerheads again. That’s why I say that the ECB has outsourced monetary policy to Tehran and Washington;

• Eurozone economic data gives the ECB some confidence. The economy is likely picking up over the summer even though the softening labor market remains a sour spot. Headline and core inflation are rising on the back of the energy price shock, but peak inflation readings will be way below what we experienced during the 2021-2022 energy crisis;

• I have penciled in one 25bps hike. Namely in September. Even if the US and Iran make peace again, that won’t derail a hike. Our central bank overlords will judge the situation to be to volatile, and simply hike just to be sure.

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