A 10 bps rate hike next year is slowly being priced out
Jitters are spreading. EUR/USD now brought down to a low of 1.1422 on the day as Italian-German bond yields spread continues to blow up.
Previously, a 10 bps rate hike by the ECB was at least fully priced by at least the end of Q4 2019 with September being around a 75% probability. All that is slowly going out the window now as market fears are growing that Italy is set to cause a real headache to the ECB's plans.
