One Trader Bets ECB Will Cut Rates by Double What Market Expects
- Trade maximizes profit on a 75-basis-point deposit rate cut
- Policymakers flag concerns the region’s economy isn’t growing
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One trader is using options to wager the European Central Bank will loosen monetary policy at double the rate currently expected.
Money markets are pricing around one-and-a-half quarter-point interest-rate cuts by June, according to swaps tied to policy-meeting dates. That’s a long way off from the start of the year when three such reductions were the consensus outcome amid fears for the growth outlook.