More interest rate hikes predicted

Schroder Salomon Smith Barney's latest outlook on euro interest rates will do little to please investors. It reports that while the second quarter of 2000 might have represented a cyclical peak for the euro zone, the latest data show that third-quarter activity is still strong.

With price pressures fading only marginally, it sees a further 25 basis points' rise in interest rates either next month or in November. Of more concern is the fact that it sees further rate rises next year. As Schroder Salomon Smith Barney says, the imminent rate hike may be factored into the markets, but anything thereafter is not.