The European Central Bank (ECB) hiked rates by 75 bps and signalled more to come. Economists at Nordea see higher rates, a flatter curve and a weaker EUR ahead.

More upside potential for EUR yields

“The ECB hiked by 75 bps and we expect another such step in October, followed by 50 bps in December and a further 25 bps early next year.”

“We see more upside potential for bond yields and expect the curve to flatten from current levels. The EUR failed to gain traction, and despite the hawkish ECB, we expect the currency to remain under pressure.”