Traders start pricing in chance of ECB rate cut late next year

Published by
Reuters UK

By Yoruk Bahceli (Reuters) – Money markets in the euro zone have started pricing in a chance of an ECB rate cut late next year, as traders bet the bank may end up overtightening monetary policy by delivering a series of big rate hikes. Last week the European Central Bank lifted its deposit rate by an unprecedented 75 basis points (bps) to 0.75% to “frontload” policy tightening and get a hold of soaring inflation. The bank implied rate rises could continue into early 2023 even as the bloc braces for recession. Since that meeting, traders have ramped up their bets on larger moves. Money markets …

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