Federer, who sat out the clay-court campaign, leapfrogged the Scot at the head of Sky Bet's market after winning a ninth Halle tournament without dropping a set.
Murray had been favourite since capturing world No 1 status and boosted hopes with a semi-final run at the French Open, but has drifted out from as short as 6/4 to 100/30 after losing to world No 90 Jordan Thompson in his opening match at Queen's Club last week.
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The reigning champion has landed just one title in 2017 and was forced to pull out of a Hurlingham exhibition match due to a sore hip, raising further questions over his readiness for grass-court Grand Slam.
Federer, in contrast, has won four of the six events he has competed in, starting the year with a shock comeback win at the Australian Open before back-to-back success in Indian Wells and Miami.
Rafael Nadal was dominant on the clay-courts thereafter, winning four out of five titles, including a 10th French Open, and is third favourite at 9/2.
The Spaniard, who is a two-time champion, has failed to make it past the fourth round at Wimbledon since 2011 and missed last year's event due to injury.
Novak Djokovic has won two of the last three titles at the All England Club but has endured a year-long slump in form since completing his career Grand Slam at the 2016 French Open.
That started with a third-round loss to Sam Querrey at Wimbledon and the Serb is up against odds of 13/2 to bounce back by claiming a fourth title.
Plenty suggest that is one of the most wide-open Wimbledon tournaments in years but all options outside the 'Big Four' are still double-figure odds.
Last year's losing finalist Milos Raonic heads the list of other contenders at 14/1, while losing Queen's finalist Marin Cilic is an 18/1 shot.
Feliciano Lopez saw off Cilic in Sunday's final but is up against odds of 80/1 at Wimbledon, while fellow recent grass-event winners Gilles Muller (s-Hertogenbosch) and Lucas Pouille (Stuttgart) are also written off at 100/1 and 125/1 respectively.
Rising star and Halle finalist Alexander Zverev is considered a more likely contender at 22/1 along with Grigor Dimitrov, Stan Wawrinka and Nick Kyrgios (all 25/1).
Juan Martin del Potro and Dominic Thiem are 40/1 the chances, while Kei Nishikori (66/1), Jo-Wilfried Tsonga and Tomas Berdych (both 80/1) are the other players with double-figure odds.
