Euro Rates Outlook
• The European Central Bank (ECB) meets on July 24, but no rate cut is expected — the focus is on forward guidance.
• Markets are split between a September or December cut; the ECB must tread carefully to manage expectations.
• More impactful than the ECB might be Thursday’s PMI data — continued upside surprises could push long-term euro rates higher.
• Structural factors like EU fiscal plans and quantitative tightening could accelerate long-end rate increases.

USD: Inflation Surprise Shifts the Narrative
• Despite a cooler core CPI print, USD surged to a 3-week high as dovish Fed bets were invalidated.
• Market over-positioning and reality checks on inflation made way for a stronger dollar outlook.
• PPI data and the Fed’s Beige Book could add further clarity — all eyes on remaining Fed speakers this week.

GBP: Sticky Services Inflation Limits Rate Cut Flexibility
• UK services inflation held steady at 4.7% in June, defying expectations of a slowdown.
• Core measures even ticked higher — indicating inflation persistence in regulated or backward-looking categories.
• Markets still see two rate cuts this year, but soft job data could force a dovish tilt from the Bank of England.

What’s Next?:
• The euro market’s next move hinges more on data than central bank surprises — especially as structural and geopolitical forces evolve. Meanwhile, the dollar is showing it won’t back down easily without firmer reasons. For the pound, sticky inflation reminds us that monetary easing won’t be as smooth as many hoped. The coming weeks will test how much resilience each currency has — and traders should prepare for rate volatility to become a dominant theme again.