UBS GLOBAL WEALTH MANAGEMENT EXPECTS ECB TO DELIVER ONE FURTHER 25BPS RATE HIKE IN DECEMBER 2026 BEFORE PAUSING

UBS Global Wealth Management forecasts the European Central Bank (ECB) will implement one additional 25 basis point rate hike in December 2026, followed by a pause in monetary tightening. This projection signals a shift in expectations regarding the terminal rate and the duration of the ECB's tightening cycle. The primary transmission mechanism is the anticipated path of interest rate differentials, which will influence Eurozone bond yields and currency valuations. Markets will closely observe upcoming inflation data and ECB forward guidance for confirmation of this projected policy trajectory.

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