SEB Research previews the July ECB policy meeting on Thursday.

"Unchanged policy rates...ECB will reiterate its data-dependent approach, not precommitting to a particular rate path, but signaling readiness to act if needed (implying further possible rate hikes)," SEB notes.

"The energy price development since the latest monetary policy meeting has been favorable and most members have recognized the possibility of not stressing the next move.  However, many members see a rate hike as highly likely, but improvements of the energy shock may call this off," SEB adds.