October 19, 2018 / 6:53 AM / a year ago

Euro zone markets push back rate hike bets as EU clamps down on Italy budget

FILE PHOTO: The skyline with its financial district and the head quarters of the European Central Bank (ECB,R) is photographed on early evening in Frankfurt, Germany, October 5, 2018. REUTERS/Kai Pfaffenbach

LONDON (Reuters) - Euro zone money markets are not fully pricing in an interest rate rise from the European Central Bank until October 2019, having earlier this week priced in a hike for September next year. ECBWATCH

Money markets now suggest there is only a 75 percent chance of a 10 bps ECB rate hike in September 2019.

Investors have been increasingly pricing in the possibility that a tussle between Italy and the European Union on budget plans may force the ECB to be more cautious in removing stimulus.

Reporting by Abhinav Ramnarayan

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