LONDON (Reuters) – Euro zone money markets no longer fully price in a 10 basis point rate hike from the European Central Bank in 2019, indicating growing investor concern about the economic outlook in the single currency bloc.
Money market futures dated to the ECB’s December 2019 meeting now price only a 95 percent chance of a rate hike, from a 100 percent chance on Monday. ECBWATCH
This is a substantial change from just a month ago, when a rate hike was fully priced in for September 2019. The latest scaling back in ECB rate-hike expectations comes against a backdrop of volatility in world stock markets and tension between Italy and the EU over a contentious budget.
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