Money Markets' Record Low Seen Pricing 50% Chance of ECB Cut
This article is for subscribers only.
European money markets that are at record lows are pricing in around a 50 percent probability the European Central Bank will cut its refinancing and deposit rates by 10 basis points this week, BNP Paribas SA said.
With the ECB’s Governing Council set to meet in Frankfurt on Sept. 4, investors are adding to bets the central bank will ease policy further to fend off the prospect of deflation in the region. The euro overnight index average, or Eonia, which measures the cost of lending between euro-area banks, fell to a record today after turning negative for the first time last week. Three-month Eonia swaps dropped to minus 0.005 percent.