European and British central bank decisions looming, energy crisis threat prompts traders to increase bets on interest rate hikes.

The threat of an energy crisis outbreak is driving traders to bet that the Bank of England and the European Central Bank will take more interest rate hikes action, with only a few hours left until the two central banks announce their latest interest rate decisions. After Iran attacked the world's largest liquefied natural gas export facility, natural gas prices surged, once again sparking concerns about inflation in the market and pushing investors to anticipate more aggressive responses from central bank officials. The currency market currently prices in more than two interest rate hikes of 25 basis points each by the European Central Bank in 2026, and bets that the Bank of England will raise interest rates by about 40 basis points by the end of the year, a significant increase from Wednesday. Although the market expects that both central banks will not adjust interest rates today, investors will focus on officials' statements to judge how this conflict will affect the outlook.