Traders bet ECB will follow Fed in 50 basis point rate cut

Money markets increased bets on the Federal Reserve easing monetary policy far more aggressively than policymakers expected. Soon after, markets also increased bets that the European Central Bank would follow the Fed in cutting interest rates. Traders now see a 60% chance of a 50 basis point rate cut by the ECB in September, having already fully priced in a 50 basis point cut from the Fed in September. Meanwhile, the probability of a 25 basis point cut by the Bank of England is rising. These bets are likely to persist, adding to the safe-haven buying of bonds at a time when markets are generally fleeing risk assets. (Jinshi)