Rate-hike expectations are increasing after European officials say Iran war-inflation may spur them into action

Traders have increased bets on a eurozone interest-rate hike this year after ECB officials warned the Iran war could force the bank to act if it triggers an inflation spike. The development raises the probability of tighter ECB policy and upward pressure on bond yields, prompting a more risk-off stance among investors.

Analysis

Traders have increased bets on a eurozone interest-rate hike this year after ECB officials warned the Iran war could force the bank to act if it triggers an inflation spike. The development raises the probability of tighter ECB policy and upward pressure on bond yields, prompting a more risk-off stance among investors.