Amid the illiquidity of a US trading holiday, Bloomberg reports that some European Central Bank policymakers are uneasy that investors aren’t betting on an interest-rate hike until December 2019, according to people familiar with the matter.

The headline was enough to spike EURUSD back to unchanged on the day...

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As Bloomberg notes, investors in the money markets are fully pricing in a 10 basis points hike to the deposit rate only in December 2019, but a move in September or October next year is on the cards, the people said, asking not to be named because the discussions are confidential.

The ECB announced last month that it will end net bond purchases this year, but also that interest rates will stay unchanged until “at least through the summer of 2019.” The wording was generally interpreted as leaving open the possibility of increasing borrowing costs already at the September meeting.

But Governing Council member Vitas Vasiliauskas said the guidance should be interpreted as “until the end of September,” highlighting the ambiguity of the language.

The market's expectations for a Sept 2019 rate-hike has now jumped from 49% to 80%...

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Of course, this is just the Bundesbank hawks trying to preserve optionality in case oil prices spike and the ECB is forced to hike sooner than expected but is definitely tilting back towards a more hawkish position.