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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
STIR
US STIR has firmed 5bp and 10bp respectively for the May and June FOMCs since the unexpected decline in the US unemployment rate to 3.5% (3.6% expected) last week. At the bell in NY trade, the Fed funds implied hike for May was 18.4bp and 18.8bp cumulative for June at 5.01% (expected terminal rate). There are 68bp of cuts priced for 2023.
- The BoC is expected to keep interest rates unchanged at its meeting on Wednesday, resulting in little change to the pricing for the April meeting, which currently indicates a 10% chance of a 25bp cut. However, pricing for meetings after June has firmed by 13-22bp since Wednesday's close, with December being the most affected, following the unexpected decline in unemployment rates in both Canada and the US.
- RBA dated OIS is 5-6bp firmer for meetings beyond August with December leading. A 25% chance of a 25bp hike in May is priced with year-end easing expectations at 24bp versus 29bp ahead of the Easter holiday.
- RBNZ dated OIS pricing is 2-4bp firmer across meetings today with 21bp of tightening priced for May. 26bp of easing is priced for Nov-23 off a terminal OCR expectation of 5.49% (July).
Figure 1: $-Bloc STIR: Terminal Rate Expectations & Year-End Pricing
Source: MNI – Market News / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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