The European Central Bank is widely expected to keep its deposit facility rate unchanged on Thursday, even as renewed military activity in the Middle East threatens to disrupt energy supplies and complicate the inflation outlook.
Market participants view the pause as the most likely outcome, with the central bank likely to adopt a wait-and-see approach rather than react immediately to geopolitical volatility.
The decision comes against a backdrop of heightened uncertainty.
A brief escalation in the region over the weekend, which involved fresh military activity before a return to ceasefire conditions, has kept risk sentiment subdued.
European equity markets are set to open with cautious expectations, reflecting the lingering impact of the disruption.
Meanwhile, US Treasury yields have remained elevated as investors navigate a quiet domestic macro calendar overshadowed by persistent geopolitical risks.