The ECB is fully expected to deliver a 25 bps rate hike this week, which will take the deposit facility rate to 2.50%. At this level, it is roughly the upper end of what most policymakers at the central bank feel that it is neutral. And if not, it borders on policy being mildly restrictive at best.The rate hike tomorrow isn't one that is going to be a gamechanger in the battle against inflation. It is in fact just more of a building block and starting point, should they need to engage in a full on fight amid fears of second-round effects down the road.In other words, the rate hike tomorrow is more of a positioning move.The more important detail in feeling out the ECB's appetite for more restrictive policy and what could trigger policymakers into acting sooner rather than later in terms tightening in the future.What is priced in for this week?A 25 bps rate hike is fully priced in by markets already. And so, there should not be any surprises from the ECB and in terms of the market reaction as well.What matters most now is how traders will move to price in the communication from the ECB statement and more importantly Lagarde's press conference. The former is not expected to pull any punches. As such, the latter is what will be the key focus in tomorrow's decision.The statement is most likely to reaffirm a data-dependent and meeting-by-meeting approach, adding that it isn't the right time to pre-commit to a particular rate path.And so the responsibility will fall on Lagarde is communicating their intentions and next steps, on whether they are seeing a potential need to act earlier or later than what markets expect.As things stand, traders are pricing in ~47 bps of rate hikes by year-end (including the one this week). And by June next year, there is ~80 bps of rate hikes priced in.Lagarde press conference in focusThe tone of her press conference will be heavily scrutinised, as markets will want to get a feel on the ECB's appetite to tighten policy further in the months ahead.But unless there is a major change to the macroeconomic projections, which seem unlikely, Lagarde will have room to keep a more measured approach in her communication.Any upgrade to near-term growth forecasts will allow her to paint a more resilient picture of the euro area economy, thus affording her flexibility in tying things together with the latest inflation developments/forecasts.Lagarde should very much also just reaffirm a data-dependent and meeting-by-meeting stance, but it will be interesting to see if she repeats the statement that the ECB's reaction function is "well understood" by markets. If so, that will imply some endorsement to what markets are currently pricing in for the central bank's next steps.Besides that, her words will be closely watched to see if they may offer any clueson the potential policy direction considering the rate hike profile that is currently priced in.The market reactionWith a 25 bps rate hike already fully priced in, the rate decision in itself will not offer anything for traders.Instead, the real market reaction will hinge almost entirely on how Lagarde frames the path ahead.A relatively neutral press conference, where Lagarde sticks closely to the ECB's data-dependent and meeting-by-meeting language, may leave the euro and European bond markets with little reason to move significantly. In this instance, her communication would implicitly reaffirm the market pricing for the ECB as noted above.The bigger reaction would come only if Lagarde gives markets reason to rethink that path.If she decides to heavily stress on second-round inflation effects, wage pressures, or the need to move policy further into restrictive territory, that could lead to a more hawkish reaction in broader markets. But with another rate hike more or less priced in for December, it may be tough to see traders push things too far here. Still, it may entice the euro to push higher and put some upward pressure on European bond yields while weighing on equities.On the flip side, Lagarde could decide to put emphasis on the 2.50% deposit rate is more or less the "sweet spot" considering the economic backdrop. It's enough to put the ECB in a spot where they can react should inflation pressures become more of a problem and not too restrictive that it chokes the economy for the time being.That might see traders pare back on a December rate hike pricing, which could weigh on the euro and pull front-end yields lower at least. This article was written by Justin Low at investinglive.com.