European Central Bank President Christine Lagarde attends the 56th annual World Economic Forum (WEF) meeting in Davos, Switzerland, January 23, 2026. <\/p>\n
Denis Balibouse | Reuters<\/p>\n
Hello, this is Leonie Kidd writing to you from London. Welcome to today’s edition of the Daily Open newsletter.<\/p>\n
Investors are anticipating a hawkish hike from the European Central Bank today, and an escalation in tensions in Iran will only add to that urgency.<\/p>\n
What you need to know today<\/p>\n The European Central Bank<\/a> is all but certain to hike rates for the first time in almost three years. Markets are pricing in a 25 basis point hike ahead of the policy decision today, as the central bank grapples with rising inflation, driven by higher energy costs due to the ongoing war in Iran. <\/p>\n Headline inflation for the euro zone rose to 3.2% in April as energy prices surged. More worryingly for the ECB, core inflation rose to 2.5%, primarily driven by higher services costs, which could be the first signs of second-round effects.<\/p>\n ECB President Christine Lagarde will speak after the monetary policy decision, and you can watch that press conference here<\/a>. <\/p>\n Meanwhile, U.S. inflation<\/a> accelerated at its fastest pace in three years, up 4.2% on an annualised basis in May. U.S. President Donald Trump’s reaction to the data was to tell a press conference: “I love the inflation.”<\/a> <\/p>\n Tensions in the Middle East have flared up once again, with the U.S. striking multiple targets across Iran on Wednesday. Kuwait has closed its airspace<\/a> due to “Iranian aggressions,” while Israel has warned of more launches expected from Lebanon. <\/p>\n The escalation is driving oil prices higher<\/a>, despite Trump’s claims that the U.S. helped secretly move over 100 million barrels of oil through the Strait of Hormuz<\/a>. <\/p>\n In corporate news, British retail group Frasers<\/a> has launched a \u20ac2 billion ($2.31 billion) takeover bid<\/a> for German premium brand Hugo Boss<\/a>. The \u20ac38 per share offer represents a 4% premium to Hugh Boss’ last closing share price, with the board saying it will review the offer. <\/p>\n \u2014 Leonie Kidd<\/p>\n And finally…<\/p>\n