Global Market: Euro zone banks tighten credit standards amid geopolitical risks, ECB survey shows

Euro zone banks tightened credit standards in the second quarter amid geopolitical risks, with 159 major lenders reporting more cautious lending and rejecting a larger share of loan applications, particularly in the automobile and energy-intensive manufacturing sectors. The ECB said banks expect further tightening across all major loan categories in Q3, while housing loan demand fell sharply. ECB is expected to keep rates unchanged this week, but rate hikes in September remain possible after inflation rose to about 3%, well above the 2% target, driven by higher oil prices linked to the Iran conflict.