Traders lower their expectations for the European Central Bank to raise interest rates, expecting a rate hike of less than 25 basis points by the end of the year

Due to the decrease in oil prices reducing inflation risks, traders have lowered their expectations for the European Central Bank's interest rate hike. The market no longer fully takes into account the expectation of another 25 basis points hike before the end of 2026 and raising the key interest rate to 2.5%, which was fully digested by the market when the European Central Bank raised the deposit rate to 2.25% two weeks ago.