PIMCO: The European Central Bank is expected to remain hawkish and hold rates, with energy possibly driving eurozone inflation to peak at 3% this year.

Golden Ten Data reported on March 19 that as Iran closed the Strait of Hormuz, reducing the supply of oil and natural gas to the region, energy costs and inflationary pressures have risen. Traders will closely monitor the European Central Bank's guidance on Thursday to seek clues on how the bank might respond. Konstantin Vyt, portfolio manager at Pacific Investment Management Company (PIMCO), pointed out: "We expect the European Central Bank to keep the deposit rate unchanged at 2% for the sixth consecutive meeting." He added: "We expect the European Central Bank to emphasize the intensifying geopolitical uncertainty and send a more hawkish signal, rather than immediately adjusting policy." He stated: "We believe that in the new staff forecasts, it may show that inflation will overshoot in the short term due to rising energy prices, but inflation will return to 2% next year." He expects the overall inflation rate to peak at around 3% this year, with energy factors contributing about 1 percentage point.