Why the July Rate Hike Is No Longer Expected - Nordea ECB Outlook

The European Central Bank is unlikely to raise interest rates at its July meeting, according to Nordea. The bank said it still expects a rate hike in September, noting that lower oil prices and softer-than-expected June inflation have eased immediate price pressures, reducing the urgency for a move next month.

Nordea's revised outlook sets the ECB apart from the Federal Reserve, which is still expected to raise rates in July. The divergence in policy paths is a factor for the EUR/USD profile.

The bank said the ECB remains on track to tighten policy again in September, barring a sharp reversal in the inflation outlook.