CORRECTED-Euro zone investors price in 70 pct chance of ECB rate hike by year end

(Corrects date of ECB meeting in 2nd paragraph to Dec. 13)

LONDON, Jan 12 (Reuters) – Euro zone money markets now price in a 70 percent chance of a 10 basis point hike from the European Central Bank by the end of the year, ratcheting up bets on a rate rise in the wake of this week’s hawkish central bank minutes.

The difference between the overnight bank-to-bank interest rate for the euro zone (Eonia) and forward Eonia rates dated for the ECB’s Dec. 13, 2018, meeting is around 7 basis points, up from around 5 bps at the start of the week.

Analysts say that means investors are pricing in a 70 percent chance of a 10 bps increase in the ECB’s deposit rate – the minimum it is likely to increase – from minus 0.4 percent.

The ECB should revisit its communication stance in early 2018 and gradually adjust its language to reflect improved growth prospects, the accounts of the bank’s December policy meeting showed on Thursday. (Reporting by Dhara Ranasinghe, Editing by Abhinav Ramnarayan)

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CORRECTED-Euro zone investors price in 70 pct chance of ECB rate hike by year end
CORRECTED-Euro zone investors price in 70 pct chance of ECB rate hike by year end

Global stocks recover as bond jitters retreat, euro hits 3-year high

LONDON World stocks scaled fresh peaks on Friday while the euro hit a three-year high and Bund yields rose as progress on forming a German government gave fresh impetus to a bond market sell-off triggered by signs the ECB may accelerate an end to its stimulus.

House passes NSA spying bill after Trump tweets cause confusion

CORRECTED-Euro zone investors price in 70 pct chance of ECB rate hike by year end

The U.S. House of Representatives on Thursday passed a bill to renew the National Security Agency’s warrantless internet surveillance program, overcoming objections from privacy advocates and confusion prompted by morning tweets from President Donald Trump that initially questioned the spying tool.  Full Article 

Source: Reuters

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