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ECB/BoE Hike Pricing Pulls Back Sharply Post-JOLTS

STIR

Pricing for ECB and BoE tightening pulled back after the US job openings data, dragged down by deepening Fed cut expectations.

  • Near-term meeting pricing is relatively intact: 22bp hike for the May ECB and 19bp for BoE.
  • But further out, compared with +1 to 2bp highs in implied peak rate pricing seen earlier today, current levels suggest the biggest drop in implied peak rates in a couple of weeks:
    • ECB terminal Depo rate pricing -5.3bp to 3.54% (Sept) - 54bp of total hikes
    • BoE terminal Bank Rate pricing -4.5bp to 4.61% (Aug) - 61bp of total hikes

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