Markets expect the ECB to keep the deposit facility rate at 2.50%. Whether the
ECB signals further tightening at the December meeting will be a key driver for
the euro and bond markets. Monitor pass-through of oil and gas costs into wages,
services prices and core inflation. Movements in the French government bond
market will inform whether the ECB judges prevailing financial conditions
sufficiently tight to affect policy. Watch for any formal developments on
Lagarde’s continuation or departure.
