LIVE: ECB Conference

The European Central Bank has raised rates by 25 basis points, bringing the deposit rate to 2.5%. The decision had already been fully priced in by investors, which explains why the market reaction has been muted so far.

Figure 1: EURUSD (August 2025 – September 2026)

Source: XTB Research, 10.09.2026

The euro is weakening against the dollar today by around 0.2%, though this appears to be driven primarily by further rises in the prices of crude oil and LNG. A barrel of Brent currently costs nearly $104.

Figure 2: Brent and WTI Crude Oil (2026)

Source: XTB Research, 10.09.2026

The conference is now underway, and for a change, it is being held in Berlin.

Key speech points:

• The economy proved resilient despite the energy shock. Growth was broad based.
• Manufacturing continues to grow solidly.
• The labour market has reamaind robust.
• The near term growth outlook has improved.
• Core inflation and services inflation both edged down last month.
• Wages do not show a material response to the energy shock.
• The ECB wage tracker points to 2.7% in H1.
• Most measures of long term inflation expectations stay close to 2%.
• Higher energy prices are expected to feed through to core and food inflation.
• Core inflation is expected to keep rising until early 2027 and moderate in 2028.
• Worsening in market risk sentiment could tighten market conditions.
• On the other hand, energy shock could last longer than expected.
• Gas prices, particularly, could increase.

Q&A:

• Three key pillars: inflation outlook, underlying inflation, transmission.
• Markets do what they have to do. We have not debated about any kind of future path today.
• When there is something about me, personally, You will be the first to know. After my grandchildren. And there is nothing to report (about possibly leaving ECB earlier).
• The neutral rate is a "work in progress" and is "highly conceptual". In the current circumstances we are not attaching great importance to it at the moment.
• The decision today was a no-brainer. It was unanimous. We are determined to deliver our target.
• We have been in a way surprised on both ends (inflation and growth). If the cutoff was later, the growth projection would be even higher.
• We believe inflation will be longer lasting than previously expected, but likely lower than expected.
• The euro has never been as popular as it is now amongst European citizens.
• El euro nunca ha sido tan popular como lo es actualmente entre los ciudadanos europeos.

(the article is updated live)