LONDON, Sept 2 (Reuters) - Euro zone money markets are now pricing in a 60% chance of a 20 basis-point cut in interest rates at the European Central Bank’s September meeting, starting to bet on a bigger move than previously anticipated.
Eonia money market futures dated to the ECB’s Sept 12 meeting show 16 bps worth of rate cuts are priced in, up from 14 bps last week.
According to analysts, this is roughly the same as saying markets price an almost 60% chance of a 20 bps rate cut, since a 10 bps rate cut is fully factored in.
They said that comments by ECB officials in recent days have fueled speculation that the central bank may be inclined to deliver a large rate cut.
Reporting by Dhara Ranasinghe; editing by Sujata Rao