Institution: Due to a weak economy, expectations for the European Central Bank to raise interest rates appear to be too high.

Analysts at French Foreign Trade Bank said in a report that expectations for a rate hike by the European Central Bank seem too high after recent data showed the fragility of the Eurozone economy. They said, "Given the possibility of a deterioration in the Eurozone's growth prospects, the pricing of expectations for ECB policy remains aggressive." With high oil prices affecting consumer and business confidence, the Eurozone's preliminary May Purchasing Managers' Index unexpectedly weakened last week. Data from the London Stock Exchange Group shows that the Eurozone money market reflects an 80% likelihood of a 25 basis point rate hike by the ECB in June, and fully reflects expectations for two rate hikes before the end of the year.