Traders warn of further ECB rate hikes in response to Israel-Hamas conflict

Markets underestimate possibility of further increases this week as crisis in Middle East escalates, analysts fear

ECB:: All eyes on bank ahead of Thursday’s meeting, whether they will vote for or against further interest rate hikes. Picture: iStock

Some of the biggest money managers in Europe say traders are wrong to bet the European Central Bank is done hiking interest rates.

As a net energy importer, the region is particularly exposed to rising prices if the crisis in the Middle East escalates, and markets are underestimating the possibility of additional tightening in response, according to Legal & General Investment Management, Vanguard Asset Management Ltd and Robeco Groep. That leaves short-maturity government bonds particularly ...