Financial markets

The environment on the euro capital and money markets is expected to remain challenging in the second half of 2026. Following the interest rate rise in June 2026, the European Central Bank (ECB) is likely to maintain a cautiously restrictive, data-driven stance in light of increased geopolitical uncertainties that are having a negative impact on energy price trends. Yields on the euro bond markets are expected to stabilize at elevated levels or increase slightly. In particular, expectations of high Government bond issuance and the ECB’s continued balance sheet reduction are weighing on the market. Economic and geopolitical risks could have a dampening effect at times.