European Central Bank: July risks reduced on softer data – Nordea
Source Fxstreet
Nordea’s analysts argue that softer June inflation data should significantly lower the risk of another European Central Bank (ECB) rate hike in July. However, they stress it is too early for the ECB to declare victory on inflation, as second-round effects remain uncertain and markets have already priced out much of the previously expected tightening for this year.
Softer data cuts rate hike risk
"Today’s numbers should ease inflation concerns and significantly lower the risk of another policy rate hike already at the July meeting."
"However, it is much too early for the ECB to call off its inflation concerns, partly because it is too early to assess the extent of any second-round effects and partly because doing so would open up for criticism with regards to the June rate hike."
"Markets have priced out a significant amount of tightening, leaving less than one additional full rate hike priced for this year."
"Only in the immediate aftermath of the ceasefire announcement in April have markets priced fewer rate hikes this year."
"Inflation concerns have eased among households too but mostly for the immediate future."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
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Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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