ECB PREVIEW : MUFG SEES OCTOBER HOLD , TWO HIKES AHEAD . SEE EUR / USD YEAR END AT 1.12

What happened: MUFG says the bond sell-off and French fiscal risks have ruled out an October ECB rate hike, though it still expects two more 25bp increases. Key numbers: December and Q1 2027 hikes to 3.00%, then a cut to 2.75% by Q3 2027. EUR/USD forecast at 1.12 year end, 1.18 by Q3 2027. Why it matters: MUFG sees France as the biggest risk to the euro, with the French-German spread the key gauge. Further scaling back of ECB hike expectations is likely to weigh on the currency, while a firm December signal would offer some support.

MUFG forecasts ECB October hold, two hikes ahead, EUR/USD year-end at 1.12.

MUFG forecasts ECB October hold, two hikes ahead, EUR/USD year-end at 1.12. — impact context not separately stored; see What changed.