LONDON (Reuters) – Euro zone money markets further scaled back expectations for rate hikes from the European Central Bank on Monday as the West ramped up sanctions against Russia, unleashing fresh uncertainty about the outlook for economic growth.
Money market futures dated to the ECB’s meetings this year now price in a total of 30 basis points by year-end, from roughly 35 bps late last week. This would be the equivalent of the ECB delivering three, 10 basis point rate increases this year.
Investors have also pushed back expectations for the timing of a first rate hike by the ECB, with the first move now fully priced for September versus June earlier this month.
Russia’s attack on Ukraine has prompted investors to scale back aggressive rate hike bets across major developed economies.
(Reporting by Dhara Ranasinghe; editing by Stefano Rebaudo)
