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The European Central Bank looks set to raise interest rates on Thursday for the second time this year, seeking to head off an energy-driven surge in inflation triggered by the Iran war.

While nearly all observers anticipate a rate hike today, there is dissent among bond markets about the terminal rate for this tightening cycle from the ECB. Much depends on events in the Middle East and their impact on energy prices and inflation.

The European Central Bank is widely expected to raise interest rates again on September 10, taking its deposit rate to 2.50%. The decision itself is hardly controversial: all 65 economists surveyed by Reuters between August 31 and September 3 predicted a 25-basis-point increase.

The European Central Bank is widely expected to hike interest rates on Thursday, erring on the side of caution as the U.S.-Iran wardrags on, keeping oil prices high and raising inflation again.

Focus in the coming week will center firmly on U.S. inflation data as investors gauge whether the Federal Reserve could raise interest rates in the coming months, and possibly as early as this month.