Keeping Lagarde up: Traders reduce bets on rate cuts after ECB president’s warning

Christine Lagarde advised the bank against lowering its guard as bank holds rates at 4 per cent

Christine Lagarde, ECB president: “We did not discuss rate cuts at all.” Picture: Getty

Markets reduced bets on the extent to which the European Central Bank will lower interest rates next year, after officials said they did not discuss the outlook for cuts.

Traders now see less than 150 basis points of rate reductions next year, down from 165 basis points priced earlier in the session, according to swaps tied to ECB policy meeting dates. Investors also decreased bets that the first move will come in March, attributing a ...