Central Banks
ECB raises rates for first time since 2023 as Iran war lifts energy costs
The ECB lifted its main deposit rate by 25 basis points to 2.25%, its first tightening move since September 2023, with energy-driven inflation from...
Analysis
Eurozone rate-sensitive sectors face a prolonged cost-of-capital headwind as markets price the deposit rate reaching 2.75% by next spring. European real estate, utilities, and high-yield corporate credit are the direct casualties: each 25bp increment compresses equity valuations in capital-intensive sectors and widens spreads on leveraged issuers. Peripheral sovereign spreads, particularly Italian BTPs, are the pressure point to watch, as higher ECB rates reduce the carry cushion that has supported Southern European debt.
4 hours ago
