The dominant 98% market-implied odds for a 25-basis-point ECB deposit facility rate hike at the June 11 meeting stem primarily from the energy price shock triggered by Middle East geopolitical tensions, which lifted euro-area headline inflation to 3% in April while pushing shorter-horizon expectations higher. April’s policy hold at 2.00% was accompanied by explicit Governing Council signals that further tightening would likely be required absent a swift reversal in energy costs, aligning with resilient labor markets and contained but firming core readings. This pricing reflects trader consensus on the need to mitigate second-round effects ahead of updated staff projections. A rapid conflict de-escalation that sharply lowers energy prices or unexpectedly soft inflation and growth data could still support an unchanged outcome.