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Money markets ramp up ECB rate hike bets again -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – A symphony light composed of lines, circles, and bars in blue and yellow illuminates Frankfurt’s south façade of the European Central Bank (ECB), headquarters, Germany. December 30, 2021. REUTERS/W

LONDON (Reuters – Thursday’s euro zone currency market trade suggested that investors were preparing for a rate hike from the European Central Bank in October. The move came just a day following rates rose bets by U.S. traders after U.S. Federal Reserve minutes released.

ECB’s October meeting saw a 10% rate rise almost completely priced into money market futures.

The markets also priced in 15 basis point of tightening by December compared to 13 bps Wednesday.

Following a rise in U.S. rates hike expectations, the eurozone money market moved. On Wednesday, minutes from the Fed’s December meeting were released. They suggested that the U.S. central banks might increase rates in March. This is a change of pace from analysts who thought June or May would be more likely.

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