EBC Markets Briefing | Euro steadies after ECB kicked off rate hikes

The euro was holding near its strongest in a week on Friday. Trump claimed that the US "just made a great settlement of the war with Iran," subject to the "finalization of documents."

Iran will treat all of Elon Musk's companies in the Middle East, including SpaceX's Starlink internet service, as military targets as it retaliates against the US, Iranian state media reported Thursday.

The ECB announced a 25-bp rate hike, and raised its inflation forecasts, saying it now expects headline inflation in the euro zone to average 3% in 2026 before cooling to 2.3% next year and 2% in 2028.

Economic growth forecasts were revised downward for this year and next year. The central bank now expects growth in the euro zone to average at 0.8% in 2026, 1.2% in 2027 and 1.5% in 2028.

The developed market rate-hiking club is getting bigger with Australia, Norway and Japan taking the lead, while more central banks are set ​to follow in the coming months.

The yield on 10-year Bunds rose to its highest level since 2011 in May. Germany could face an unprecedented period of stagnation heading into 2030 despite massive stimulus rolled out earlier.

The single currency is experienced a short-term, low-momentum counter-trend retracement upward. EBC Financial Group analyst sees it rise further towards 1.1590 given the push above the resistance at 1.1567.

Asset recap

As of market close on 11 June, among EBC major products, Lam Research shares led gains. ​Mizuho has noted upgrading its wafer fab equipment estimates significantly.

Oracle shares tumbled after the software maker told investors to expect an additional $20 billion capital raise, while reporting negative free cash flow for the year.

Gold rallied though JPMorgan says demand for Bitcoin and gold as inflation hedges is fading, citing gold ETF outflows and Bitcoin spot ETFs recording net outflows for four consecutive weeks.

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