Summary: With euro‑area inflation hovering near 2% and growth subdued, the ECB is set to hold rates this week. Separately, the ECB and PBOC extended a 45 bn‑euro swap line, underscoring financial backstops amid trade frictions.
Why it matters
A pause gives policymakers time to read services inflation and wage dynamics. For borrowers, stable rates anchor funding costs; for FX, guidance and projections will steer the euro’s path.
Key facts
- Inflation: ~2.1% (Aug)
- Policy: hold likely at this week’s meeting
- Liquidity: ECB–PBOC swap line extended (45 bn euros)
What to watch
New staff projections; language on services inflation; timeline discussion for any 2026 easing; implications of the swap‑line extension.
Sources
- https://www.reuters.com/markets/europe/euro-zone-inflation-edges-up-august-pointing-steady-ecb-rates-now-2025-09-02/
- https://www.reuters.com/business/finance/are-we-done-already-five-questions-markets-ahead-ecb-2025-09-08/
- https://www.reuters.com/business/finance/ecb-pboc-extend-45-bln-euro-liquidity-line-2025-09-08/