Investors will get an update on the former this week, with Thursday's European Central Bank meeting. The ECB is widely expected to raise rates, with the key question for investors being whether they will give any indications about their future plans.
Markets currently see around an 80% chance of a further rate hike by December this year, on top of a move this week and in June.
Though Laura Cooper, global investment strategist at Nuveen, said traders have got ahead of themselves, "pricing further tightening that is not supported by unfolding data."
"For the ECB to hike again later this year, as markets are largely pricing for December, there would need to be renewed wage pressure or clearer evidence that higher energy costs are feeding into underlying inflation and medium-term inflation expectations," she said.
Recent data showed services inflation, closely watched by the ECB, dropped despite August's overall jump in price growth.
But there is plenty for investors to process before Thursday, including a relentless climb in energy prices, with Brent crude closing in on $100 a barrel and Dutch benchmark wholesale gas prices around their highest since late 2022, and well above the ECB's current forecasts.
Meanwhile, at the weekend the far-right AfD won a historic victory in a German state election, further adding to political uncertainty in the euro zone's largest economy, though so far it has caused little market reaction.
And investors are also watching to see whether ructions in Japan's bond market spill over elsewhere, and if higher yields in Japan cause a rerouting of investment flows.
Long dated Japanese government bonds, which have been under pressure, rallied on Tuesday, flattening the yield curve.
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