September 18, 2018 / 12:57 PM / 3 months ago

Money markets push up bets on Oct 2019 ECB rate hike

LONDON, Sept 18 (Reuters) - Euro zone money markets now fully price in a 10 basis-point rate rise from the European Central Bank in October next year, reflecting an increase in rate hike expectations since the central bank’s meeting last week.

The difference between the overnight bank-to-bank interest rate for the euro zone (Eonia) and forward Eonia rates dated for the ECB’s October 2019 meeting was almost 11 basis points on Tuesday, up from around 8.5 bps last week.

That indicates investors are fully pricing in a 10 basis point hike in the ECB’s deposit rate — the minimum it is likely to increase — from minus 0.4 percent currently.

Reporting by Dhara Ranasinghe; editing by Sujata Rao

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