Euro interest rate markets are pricing in a rate cut by the ECB at its next policy meeting on 12 September.
I'd like to share a few facts about USD interest rates. On 10 June, the US Federal Reserve’s funds rate's upper bound was 2.5%, $1 million Libor fixed at 2.41%, and the five-year USD swap rate traded at 1.92%.
Consider the above numbers against the fact that, as recently as November last year, the five-year swap rates stood at circa 3.2%. In other words, the market expected at least two further rate hikes over the course of 2019.