Economics
Traders Pare Wagers on ECB Rate Hikes as Recession Fears Mount
- Less than 100 basis points of hikes priced by December
- Repricing comes after weak US economic growth report
Joggers run across a bridge close to ECB headquarters in Frankfurt.
Photographer: Alex Kraus/BloombergThis article is for subscribers only.
Traders rushed to trim European Central Bank tightening wagers and bonds surged after data showed the US economy shrank for a second straight quarter, fueling concerns a recession may spread to Europe.
Money markets are pricing less than 100 basis points of hikes by December according to swaps tied to ECB meeting dates, the least since the middle of June. That compares with almost 140 basis points of tightening after officials ended an era of negative interest rates last week with a surprise half-point hike.