Eurozone money markets yesterday priced in a higher chance of a rise in European Central Bank interest rates after Emmanuel Macron won the first round of the French presidential election.

Forward Eonia bank-to-bank rates dated for the ECB policy meeting on March 8 next year stand at around minus 30 basis points, about six bps above the Eonia spot rate of minus 36 bps.

Such a gap indicates markets are pricing in roughly a 60 per cent chance of a 10 bps hike in the ECB’s minus 0.4 per cent deposit rate by next March.

Late last week, the gap suggested just a 20 per cent chance of such a hike.

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