April 24, 2017 / 7:34 AM / 3 months ago

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

1 Min Read

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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