Traders Waging Euro Zone to Hike Rate in September

Money markets are anticipating the European Central Bank would increase interest rate in three months to fan down inflation.

Traders are pricing in a quarter-point hike in both July and September. This would mark the first hike in more than a decade.

“Given the hawkish comments from ECB this week, we should start to consider July as a very realistic option,” said Piet Christiansen, chief strategist at Danske Bank as reported by Bloomberg.

Policy makers globally are in fears of skyrocketing inflation, with figure at a record high nearly four times the 2% of ECB’s target.

Traders are betting on a total of three hikes by year-end, a far cry from the start of the year when not even a quarter-point increase was anticipated.