ECB delivers second 25bp rate hike of the year as oil-led inflation pressures build; markets see 90% odds of another move by year-end

The ECB's second 25bp hike this year, driven by oil-led inflation pressure, signals a more restrictive policy path and tightens euro-area financial conditions. Markets pricing a high probability of another hike reinforces higher front-end rate expectations, raising discount rates and potentially pressuring rate-sensitive risk assets. The euro is the most direct transmission channel, as relative policy expectations versus peers can shift FX positioning and hedging flows.