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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.
ECB
December ECB hike pricing has faded to a post-Oct meeting 55bp overnight, following a Bloomberg sources story late Weds signalling the GC may slow the hike pace to 50bp from 75bp.
- On current evidence, 50bp may be more likely than 75bp on Dec 15th, but the balance of probabilities is likely closer to 50/50 than the current 80/20 implied.
- A 50 bp hike would get the depo rate to 2% and still represent a decent amount of tightening with ability to calibrate in future meetings, while not being so dovish as to signal that the tightening cycle is drawing to a close.
- Indeed, MNI Policy Team's sources piece out earlier in the week said 50 was seen by most officials as the most likely choice - but doves might offer to back another 75bp hike if in exchange the ECB decides to wait until rates peak before starting QT.
- The November inflation read looks like it could be the decider. ECB VP de Guindos was circumspect yesterday on 50 vs 75bp - but saying “let’s see what happens in November" re flash EZ inflation data on Nov 30 that will impact both the Dec quarterly forecasts and the rate hike decision.
- Ahead of that, Nov 29's German inflation data looms large.
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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