FILE PHOTO: ECB's Lagarde speaks to reporters following monetary policy meeting in Frankfurt - For the first time in over a year, traders are struggling to gauge whether the European Central Bank will raise interest rates at its next meeting, with the outlook blurred by still sticky inflation and a stuttering economy.
Danske Bank chief analyst Piet Christiansen said traders' indecisiveness reflected "the battle between the growth and inflation outlooks". Indeed, it was last week's forward-looking PMI activity data that pushed investors to price in a pause. Overall money supply in the bloc contracted in July for the first time since 2010, demonstrating the extent to which ECB policy has tightened financial conditions.
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