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Yields on eurozone government bonds declined as investors lowered their expectations for the ECB raising rates after the U.S. and Iran reached an agreement to end conflict.

Left behind in the AI trade, European markets deserve a fresh look.

The European Central Bank raised interest rates for the first time in almost three years, concluding it can no longer ignore the upswing in inflation caused by the Iran war. The deposit rate was lifted to 2.25% from 2%.

ECB hikes interest rates for first time since 2023 as Iran war ramps-up energy costs

The closure of the Strait of Hormuz and ensuing jump in energy prices has dramatically altered the paths for central banks around the world.

European stock index futures were relatively mixed today, June 11, as investors watched the developments in the Middle East and the impact on the energy market. They also wavered ahead of the European Central Bank (ECB) interest rate decision.

The European Central Bank is expected to raise interest rates for the first time since 2023 as inflation accelerates, a move that could offer clues about the Federal Reserve's next steps.

The European Central Bank is expected to raise interest rates on Thursday, amid spiking energy prices. The euro zone is a major energy importer, making it particularly vulnerable to elevated oil prices.

Alongside an anticipated interest-rate hike on Thursday, the central bank is expected to raise its inflation forecast from March, which assumed a swift end to the war in Iran.

U.S. inflation data in the coming week will be closely watched as investors gauge how likely it is that the Federal Reserve will raise interest rates this year.