UPDATE 1-Traders stick with ECB hike bets as oil touches $100 once more

ECB leaves rates steady, keeps door open to more tightening

Euro zone bond yields rise, euro falls

Brent crude oil touches $100

Updates after ECB press conference

By Yoruk Bahceli and Sophie Kiderlin

LONDON, July 23 (Reuters) - Traders stuck to their bets that the European Central Bank will resume rate hikes from September on Thursday as oil prices hit $100, reinforcing that policy will likely need further tightening to combat inflationary risks.

The ECB kept interest rates unchanged as expected on Thursday but held the door open to another increase in September, as a fresh jump in energy prices threatened to keep inflation well above its 2% target.

Just as President Christine Lagarde spoke to journalists following the bank's decision, oil prices touched $100 for the first time in nearly two months, adding to their sharp rise this month.

They rose for a fifth day after Yemen's Houthis said they struck two Saudi oil tankers, widening disruption to global oil shipping through both the Red Sea and the Strait of Hormuz as the Iran war escalates.

"As the "energy shock has yet to play out", we think this leaves September as a live meeting and we continue to expect a hike at that point," said Rufaro Chiriseri, head of fixed income at RBC Wealth Management, quoting the ECB's decision statement.

Bond markets were paying more attention to the surge in oil prices rather than the ECB, he added.

Markets continued to price around a 95% chance of a 25 basis-point ECB rate hike in September, and a similar probability of a further more by December, in line with expectations before the ECB's decision.

Germany’s 2-year bond yield DE2YT=RR, which is sensitive to interest rate expectations, was last up around 2 basis points 2.86%, remaining near a two-year high it touched earlier in the day.

The 10-year yield, the benchmark for the euro area, was up similarly at 3.19%, just shy of a 15-year high it touched earlier.

The euro EUR=EBS dropped 0.3% to $1.1373, its lowest since July 1, even as traders stood pat on their rate hike bets, highlighting the bloc's energy dependency.

Europe's broad STOXX 600 share index .STOXX extended its fall and was last down 1.4%.



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