Money markets curtail bets on ECB rate hikes over concerns about coronavirus variants


Headquarters of the European Central Bank (ECB) in Frankfurt, Germany, March 12, 2016. (KaiPfaffenbach / Reuters)

London — Friday’s eurozone money markets have curtailed bets on rate hikes from the European Central Bank next year as news of a new coronavirus variant across South Africa casts a shadow over the short-term economic outlook. ..

Money market futures were priced in December 2022 with a probability of about 50% of a 10 basis point rate hike from the ECB, which was fully priced earlier this week.

The move was reflected in the slight pullback of rate hike bets in the US and UK.

The latest COVID-19 headline news comes from Europe already fighting the resurgence of the virus and imposing new restrictions in many countries.