ECB Rate Hike Expectations Fully Priced In as Market Sees Below-50% Odds for July Hike

According to Jin10, citing foreign exchange strategist Karamanis, euro option markets on June 11 show traders expect the European Central Bank's meeting today to pass without surprise, as rate hike expectations have been fully digested by the market. Swap markets currently price the probability of consecutive hikes in July at below 50%, signaling traders favor a pause extending into September. The euro is unlikely to experience significant volatility unless market pricing for three rate hikes through year-end faces a material challenge. ECB President Lagarde is expected to provide little new guidance beyond reiterating that future decisions will depend on data.
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