Money markets fully price in ECB rate hike by Dec 2022

Money markets moved on Monday to fully price a 10 basis-point rate hike from the European Central Bank by the end of next year, as policy-tightening expectations continue to rise in the face of rising inflation.

Eonia money market futures dated to the ECB’s December 2022 meeting now see a 100% chance of such a move, compared with a roughly 60% chance on Friday. ECBWATCH

The chance of a September 2022 rate hike stood at more than 80% versus roughly 50% at the end of last week, according the money market pricing.

In early European trade, euro zone bond yields continued their march higher as inflation angst continued to grip bond markets. Germany’s benchmark 10-year Bund yield rose to -0.12% DE10YT=RR, its highest since May.
Source: Reuters (Reporting by Dhara Ranasinghe; editing by Sujata Rao)