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Free AccessDec ECB Hike Pricing Slips With 50bp Eyed
A couple of drivers behind the pullback in December ECB rate hike expectations today, 60bp at one point (40% of a 75bp hike vs 50bp) vs 63bp at the high:
- Near-term ECB hike expectations pulled back as Exec Board member Panetta said this morning that aggressive tightening is not advisable.
- In an exclusive out earlier today, sources told MNI that while 50bp was seen by most ECB officials as December's most likely size of hike. Even so, some said doves might even back another 75bp hike in exchange for waiting until the rate peak before starting QT.
- 61bp is still a couple of basis points lower than they were pre-US CPI last Thursday; the Terminal rate is seen at 2.93% in mid-2023, just 1bp below last Thursday's open.
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