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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
ECB hike pricing slipped Wednesday following more dovish-than-expected commentary by Holzmann, and an MNI ECB sources piece which cited doves' case to seize on weaker inflation readings to argue for smaller rate hikes in the spring.
- OIS implied pricing points to the first time since Dec 20 that 2023 hikes will amount to just 140bp (to a terminal depo rate below 3.40%), a drop of over 10bp on the day.
- Feb pricing remained firm at 48bp, though cumulative pricing through Mar fell 4bp to 88bp.
Meanwhile, BoE hike pricing slipped by a similar magnitude, though the move was largely independent of the ECB repricing. Rationale for the implied rate drop was difficult to pinpoint, though we did note multiple potential factors including squaring positions ahead of US inflation data tomorrow.
- Terminal BoE rate expectations fell by 9bp to just over 100bp, implying Bank Rate of 4.50% by August. That's the lowest terminal rate pricing since the December MPC.
Source: BBG, MNI
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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