LONDON 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)