Money markets scale back ECB rate hike bets on coronavirus variant worries

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The headquarters of the European Central Bank (ECB) in Frankfurt, Germany, March 12, 2016. REUTERS/Kai Pfaffenbach/File Photo

LONDON, Nov 26 (Reuters) – Euro zone money markets on Friday scaled back bets on a rate hike from the European Central Bank next year as news of a new coronavirus variant spreading across South Africa cast a shadow over the short-term economic outlook.

Money market futures were pricing in roughly a 50% chance of 10 basis point rate hike from the ECB in December 2022, having fully priced in such a move earlier this week .

That move was reflected by a smiliar pull back in rate hike bets in the United States and Britain. read more

The latest COVID headlines news comes as Europe already battles a resurgent outbreak of the virus, triggering fresh restrictions in a numebr of countries.

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Reporting by Dhara Ranasinghe Editing by Rachel Armstrong

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