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Money Markets Trim Their Bets for an ECB Rate Cut

Money Markets Trim Their Bets for an ECB Rate Cut

(Bloomberg) -- Investors have pared back pricing on the prospect of a rate cut from the European Central Bank.

Money markets now see a slimmer chance of a reduction in the benchmark deposit rate anytime before July 2020, compared with March 2020 that was priced in going into the ECB’s policy review. While a full 10-basis point cut that was factored in earlier, they now see odds of an eight basis point move.

Money Markets Trim Their Bets for an ECB Rate Cut

Meanwhile, five-year, five-year inflation swaps in the euro area have fallen 4 bps to 1.24%, approaching a record low.

To contact the reporter on this story: John Ainger in London at jainger@bloomberg.net

To contact the editor responsible for this story: Ven Ram at vram1@bloomberg.net

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