European Central Banks Signal Hawkish Stance Amid Rate Stability

Last week, the European Central Bank and the Bank of England maintained their interest rates unchanged, yet issued clear hawkish signals. According to Ming Pao, this has led to a significant market reassessment of the future policy paths of these central banks. Current swap market data indicates a bet on both banks reversing course to raise rates by over 60 basis points within the year, which is a substantial shift from the rate cut expectations at the beginning of the month.