Despite another stretch higher in oil prices, markets are sticking to the view that the European Central Bank will hold the deposit rate at 2.25% at this meeting, in line with our own thinking. September is more likely to see a hike, and indeed markets are pricing in 23bp then. One could argue that front-loading another hike now makes sense. Over the past few years, however, the ECB has not acted without fully telegraphing a move in the weeks before the meeting. With longer-term inflation expectations still well-anchored, the ECB can hold rates steady for now. The 10Y inflation swap rose on the back of higher oil ... (full story)