Eurozone borrowing costs rose after the European Central Bank lifted its deposit facility rate by 25 basis points to 2.50% and indicated inflation could remain above its 2% target until late 2027. Germany's 10-year Bund yield crossed 3.5%, while Italian yields reached their highest since late 2023 and French yields hit 18-year highs. Renewed U.S.-Iran hostilities pushed crude oil above $100 a barrel, adding to inflation risks. Goldman Sachs, Citigroup, Barclays, UBS Global Research and UBS Global Wealth Management expect another ECB rate increase in December; Citi also forecasts a further move in March 2027, while UBS Global Research expects rates to return to 2.5% by the fourth quarter of 2027. Traders assign a 94% probability to a quarter-point December increase, according to LSEG data. In a separate note, eToro's Lale Akoner said energy producers and insurers could benefit from elevated energy prices and higher rates, while property companies, housebuilders, smaller companies and retailers could face pressure; banks may initially gain from wider lending margins, although that benefit could fade if loan demand weakens and defaults rise.