Money markets are anticipating the European Central Bank would increase interest rate in three months to fan down inflation.
Traders are pricing in a quarter-point hike in both July and September. This would mark the first hike in more than a decade.
“Given the hawkish comments from ECB this week, we should start to consider July as a very realistic option,” said Piet Christiansen, chief strategist at Danske Bank as reported by Bloomberg.
Policy makers globally are in fears of skyrocketing inflation, with figure at a record high nearly four times the 2% of ECB’s target.
Traders are betting on a total of three hikes by year-end, a far cry from the start of the year when not even a quarter-point increase was anticipated.
