0522 GMT - Allspring Global Investments expects the European Central Bank to raise interest rates by 25 basis points on Thursday, in line with market pricing, while its ability to sound dovish is limited. Allspring expects eurozone core inflation to remain elevated in the coming months due to base effects, further boosted by higher inflation expectations across the curve, portfolio manager Rushabh Amin says in a note. The likelihood of higher commodity prices undermining surprisingly resilient economic growth is likely to be a focal point for markets in the coming weeks and months, he says. "This combination limits the ECB's ability to sound dovish." Markets price a further hike by December and another between March and June of 2027, according to LSEG.
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