Flatter Front-Loaded Rate Path Seen Post-Decision

The dust is still settling in rate markets following the ECB's 50bp hike, so we would caution against reading much into implied probabilities, but for the moment pricing is for a basically flat path for the rest of the year including less than a 50% probability of a full 25bp hike in either of May or June.

• That's around 12bp of hikes remaining or 62bp including today's - the same cumulative magnitude as pre-decision, when 25bp was still given a higher probability of 50bp (though an earlier peak vs the Oct/Dec seen prior).
• So a more front-loaded path now foreseen, inevitably due to the "surprise" 50bp raise, but no real change in expected tightening overall.