ECB Expected to Hold 2%, Hike 25bp

UBS forecasts ECB will keep policy rate at 2% at April 30 meeting, signaling patience amid Middle East tensions.
The bank projects 25 basis point hikes in June and September, with a July pause, raising the benchmark to 2.5%.
Market pricing shifted from cut expectations to >80bps hikes by March, then eased to ~43bps after Lagarde, Schnabel remarks and Hormuz news.
UBS notes confirmed Hormuz de‑escalation could lower energy prices, granting ECB additional time before further rate moves.