The ECB will announce its interest rate decision on Thursday. It is expected to keep interest rates unchanged in order to gain time to assess the impact of the further escalation of the US-Iran conflict. Traders and economists all predict that the ECB will not act again after raising interest rates last month. Central bank officials previously thought deposit interest rates of 2.25% were “appropriate.” The US and Iran reached a temporary cease-fire agreement in June, and inflation in the Eurozone for that month was lower than expected, which once raised expectations that the worst phase of this war might have passed. However, as the conflict resumed, crude oil futures rose to a six-week high, and the market's expectations for further tightening of the ECB's policy are once again heating up. Policymakers have yet to release clues about the policy path in September and beyond, so the market will pay attention to ECB President Lagarde's statement. The ECB will announce the interest rate decision at 2:15 p.m. Frankfurt time, and Lagarde will hold a press conference 30 minutes later. Lagarde is expected to emphasize that the ECB will make decisions meeting by meeting based on data. However, she may still send some signals about whether the market's expectations for the September rate hike are reasonable under the current circumstances.

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