Speculations on the money market about a large ECB rate hike are increasing

Frankfurt On the money market, speculation of a very large interest rate hike has run rampant following the latest statements by the ECB monetary authorities at a central bank symposium at the beginning of the week. Prices there on Monday showed that traders have now priced in 0.67 percentage points of rate hikes for the European Central Bank’s (ECB) interest rate meeting on Sept. 8.

This means that a 0.50 percentage point hike is seen by investors as a foregone conclusion and the probability of an even bigger 0.75 percentage point hike is estimated at around 67 percent. Before the central bankers’ appearances at the weekend, the probability of such an even stronger interest rate hike was only estimated at 24 percent on the money market on Friday.