April 24, 2017 / 7:34 AM / 4 months ago

Euro zone money markets see more chance of ECB hike in early 2018 after French vote

The new head quarters of the European Central Bank (ECB) in Frankfurt is pictured next to a red traffic light, January 22, 2015.Kai Pfaffenbach/Files

LONDON (Reuters) - Euro zone money markets on Monday priced in a higher chance of a rise in European Central Bank interest rates after Emmanual Macron won the first round of the French presidential election.

Forward Eonia bank-to-bank rates dated for the ECB policy meeting on March 8 next year stand at around minus 30 basis points, about 6 bps above the Eonia spot rate of minus 36 bps.

Such a gap indicates markets are pricing in roughly a 60 percent chance of a 10 bps hike in the ECB's minus 0.4 percent deposit rate by next March.

Late last week, the gap suggested just a 20 percent chance of such a hike.

Writing by Nigel Stephenson; Editing by Dhara Ranasinghe

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