Traders Now See 30% Chance of 2026 ECB Hike After Schnabel View

Traders are betting on a European Central Bank interest-rate hike next year for the first time after a senior member of the institution said she’s comfortable with the next move in borrowing costs being higher.

Money markets on Monday shifted to see around a one-in-three chance of a quarter-point increase by December 2026, the most aggressive pricing for a hike since monetary easing began last year. That drove up yields on German five-year bonds by almost 10 basis points.