Money markets have scaled back their wagers on an interest rate increase from the European Central Bank, as falling oil prices have reduced inflation expectations.

For the first time since April, traders are no longer fully pricing in an expectation for the deposit rate to reach 2.5% by the end of the year.

Swap contracts now imply an increase of just 24 basis points by year-end, down from 26 basis points on Thursday and 37 basis points last week.

Brent crude oil prices fell 2.9% to $73.11 per barrel, having dropped to pre-war levels earlier in the week.

The yield on Germany's 2-year government bond fell by 2 basis points to 2.51%, while yields on 2-year bonds in the US and UK declined by 3 basis points to 4.09% and 2 basis points to 4.09%, respectively.