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of Laura Naka Antonelli
Market Expectations on A Possible monetary tightening at this month's meeting
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The fact that several investors are banking on the first rate hike in the euro area in December 2019 makes some ECB officials nervous. That's what Bloomberg reports, adding that for some members of the Governing Council of the European Central Bank, a monetary tightening by the end of 2019 would be too late. It is the same officials who say anonymously that a rate hike in September or October of next year is, among other things, an open option. Market expectations are therefore changing: the euro is moving, which is rising after rumors, and money market bets on future movements by Mario Draghi & Co are doing the same.
The euro, which at the time of the rumor spread was still showing a still uneven trend, strengthened in the morning, approaching at the $ 1.17 threshold. The single currency is also gaining in pounds sterling, around GBP 0.88, on the yen, hovering above JPY 129, and on the Swiss franc, around CHF 1.16
Market expectations are also rising as well. 39; a monetary tightening in September 2019, rose from just under 70% yesterday to 80%. But by the end of June, the probability of a monetary tightening was less than 50%
In fact, according to Bloomberg, investors operating in the money markets up to 100% have estimated the probability of a rise Eurozone rate – exactly an increase of 10 basis points on the deposit rate, now negative at -0.40% – only in December 2019.
"Last month the ECB announced that it will end net purchases of bonds this year (purchases of badets that are part of the quantitative easing program), adding that the rates interest will remain unchanged "at least until the summer of 2019" – reads in the Bloomberg article – Now these words imply that the possibility of raising rates was left open at the September meeting ".
However, the ambiguity is not lacking, considering that Vitas V asiliauskas among the bankers who make up the Board of Governors of the European Central Bank, pointed out that the guidelines of the ECB contained in the statement of the ECB should be interpreted as "until the end of September". 19659013] But at this point, the cards on the table may have changed, since the ECB may decide to raise rates with Mario Draghi still at the helm. The term of office of the Central Banker expires officially on October 31, 2019.
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