The money market pricing now reflects less than 150 bps worth of rate hikes by the ECB by year-end and that is quite a retreat since last week where traders saw around ~170 bps. The move is also reflected in a drop in European bond yields, with 10-year German bund yields now down another 7 bps to 1.35%. From the high this week, it has dropped by almost 45 bps:
