Markets May Be Too Hawkish on ECB Tightening, RBC and Citi Say

Money markets may be too hawkish when it comes to predictions for European Central Bank tightening, providing opportunities for bets on a slower pace of rate hikes, according to strategists at RBC Europe and Citigroup Inc.

Interest-rate swaps are wagering on almost three quarter-point rate hikes across the next three policy decisions as the ECB struggles to get a grip on inflation running at more than four times the bank’s 2% target.