Big moves overnight / on the open

There have been further big moves in STIR futures both overnight and on the open as markets price in less aggressive hiking paths, particularly for the Fed.

• SOFR futures are up to 24.5 ticks higher since Friday's close with the biggest move in the Jun23 contract. Since Thursday's close, the biggest move has been in the Dec23 contract which is 68 ticks higher. Markets are now pricing in around 23.5bp for next week's meeting with a peak cumulative 50bp priced by June (a terminal rate of 5.00-5.25%). A cut thereafter is now more than fully priced for H2-23.
• Euribor futures are up 12 ticks for the Sep23 contract since Friday's close with the Dec23 contract up 30 ticks since Thursday's close. There is now around 46bp priced for this week's meeting (similar to Friday's close but down from around 49bp on Thursday). This indicates the market is looking for some downside risks to a 50bp hike this week. There are still 127bp of cumulative hikes priced by the October meeting, around 40bp below last week's peak.
• SONIA futures are up to 11 ticks higher today (Dec23 contract) with the biggest move since Thursday's close the Dec23 contract which is up 38.5 ticks. Markets now price around 18bp for next week's meeting (from around 26bp on Thursday) with a cumulative peak of 57bp of hikes priced by September (down from around 90bp on Thursday).