Traders Boost Rate Hike Bets for European and UK Central Banks, Pricing in Around Four Increases by End of Next Year
Deep News
Yesterday
As global oil and gas prices climb, keeping markets on edge over inflation risks, traders have intensified their wagers on rate hikes by the European Central Bank, now anticipating four increases by the end of next year.
Swap markets currently factor in a cumulative tightening of roughly 90 basis points through December 2027, which would push the ECB's deposit rate up to 3.25%. This marks the largest rate-hike expectation priced in during the current tightening cycle.
Traders have also ramped up bets on the Bank of England, forecasting a cumulative tightening of about 90 basis points by the end of 2027, the highest level since March. This would lift the UK central bank's main rate to approximately 4.75%.
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