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According to Reuters, Eurozone money markets slashed their expectation for a European Central Bank (ECB) rate hike in June 2019, mainly in response to the Italian political tensions and dwindling economic growth.

Key Highlights:

“Eurozone money markets now price just a 30 percent chance of a 10 basis point rate rise from the European Central Bank in June 2019.

The difference between the overnight bank-to-bank interest rate for the eurozone (Eonia) and forward Eonia rates dated for the ECB’s June 2019 meeting was 3 basis points on Tuesday, down from around 6 bps last week and 9 bps earlier this month, ECBWATCH showed.

The chances of a June 2019 rate hike has to 30% after having been at about 60% last week and 90% at the start of the month.”