Elevated eurozone inflation, which climbed to 3.2% in May with core measures reaching 2.5%, driven by persistent energy price pressures from the Iran conflict, forms the primary catalyst behind the market-implied 98.9% probability of a 25 basis point ECB rate hike at the June 11 meeting. Recent hawkish communications from Governing Council members, including signals that the bank should act even amid potential de-escalation, have reinforced trader consensus for tightening from the current 2.00% deposit rate toward 2.25%. This positioning aligns with the ECB’s 2% inflation target and contrasts with the April hold, as incoming data showed upside risks intensifying. A sharp, sustained drop in energy costs or unexpectedly dovish forward guidance could still introduce modest uncertainty, though near-term resolution limits such scope.