Markets Push Ahead of ECB on Rate Hikes Expectations

Rabobank's Senior Macro Strategist Bas van Geffen notes that EUR money markets are pricing in more than four additional European Central Bank (ECB) rate hikes beyond the two already delivered.

This is a significant increase in expectations, with investors pushing ahead of policymakers. ECB President Lagarde has been cautious about endorsing market understanding of the reaction function.

Recent leaks suggest that any next move by the ECB is more likely to happen in December than October, tempering front-loaded tightening bets.