Market Confidence in ECB June Rate Hike Weakens

On April 30, according to foreign media reports, traders' confidence in the European Central Bank (ECB) raising interest rates as early as June has slightly decreased. This comes as policymakers weigh the impact of rising energy prices on inflation and economic growth. The ECB stated that the war in Iran has disrupted global energy flows, exacerbating the risks of rising inflation and slowing economic growth. Following this announcement, yields on Eurozone bonds and the euro both fell, leading traders to slightly lower their expectations for a rate hike in June. The money market is currently pricing in a rate hike of 22 basis points for June, down from about 26 basis points earlier on Thursday; the cumulative rate hike expected by the end of the year is approximately 72 basis points, down from the previously anticipated 76 basis points.