Deutsche Bank Issues Major Warning: Euro, UK, and Canada Rate-Hike Expectations Overextended—Macroeconomic Volatility Is Coming

Senior forex analyst Thu Lan Nguyen at Deutsche Bank explicitly warns in a recent market research report: The current global financial markets’ pricing of rate hikes by the European Central Bank and the Bank of England has been severely overextended. The market widely expects the two major central banks to complete two rate hikes by the end of 2025, but this view lacks fundamental support and carries an extremely high risk of expectation repricing and backtracking. Core inflation in the Eurozone and the UK is broadly on a downward trajectory, while the momentum for economic recovery is weak. Manufacturing and service-sector sentiment is insufficient to support the rate-hike rationale. If expectations fail to be met, funds will pull out in a concentrated manner, triggering a reversal in market sentiment.

Based on LSEG money-market data, this Thursday’s ECB and BoE rate decisions have already been broadly priced in by the market as the expectation of “keeping rates unchanged.” Going forward, attention will shift to the central banks’ policy wording, inflation outlook, and economic guidance. Before the decision is released, divergence between bulls and bears will intensify, and market participants will begin to place bets in advance. The British pound and the euro will enter a high-volatility phase, making it easy to see a spike followed by a pullback or rapid declines—sparking chain-reaction shocks in the FX market and transmitting to major global asset classes, further amplifying volatility in the crypto market.

The market is currently in a window of expectation-driven positioning. Earlier rate-hike expectations were largely emotion-based pricing rather than rational judgment. As the decision approaches, market volatility will rise, and rapid switches in macro sentiment, the dollar’s trend, and risk appetite will directly affect where the crypto market goes next. $BTC $GT $ETH #比特币突破7.9万美元 #加密市场普遍上涨