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ECB rate hike by March 2018 now fully priced into money markets
March 10, 2017 / 8:27 AM / 8 months ago

ECB rate hike by March 2018 now fully priced into money markets

LONDON, March 10 (Reuters) - Investors now expect the European Central Bank to raise interest rates by March 2018, according to money market pricing.

Forward Eonia bank-to-bank rates dated for the ECB meeting on March 8 next year have risen to around minus 0.25 percent, some 10 basis points above the overnight rate of minus 0.35 percent.

Analysts say this gap suggests markets are pricing in a 10 basis point hike in the ECB’s deposit rate by next March, shortly after the scheduled end of the ECB’s current bond-buying scheme.

The ECB’s deposit rate is currently minus 0.40 percent

These money market rates also suggest there is around an 80 percent chance of a 10-basis point hike by the meeting on January 25, 2018. (Reporting by John Geddie; Editing by Jamie McGeever)

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