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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
The spread of BoE over ECB peak depo rate pricing fell to its lowest since mid-May (155bp vs 250bp as recently as June) on Thursday after the ECB's "dovish" 25bp hike, with BoE peak pricing slipping to a fresh 3-month low.
- ECB terminal depo Rate pricing +2.1bp to 4.04% (4bp of further hikes left in the cycle to Dec 2023): The Governing Council's semi-surprise (around 2/3 priced) decision to hike 25bp nudged up terminal rates a couple of basis points but the hike cycle is all but seen as done. Attention is already turning to cuts (as noted by ex-ECB chief econ Praet in an interview with MNI today, the ECB could be discussing potential cuts as soon as the December meeting), with the first full 25bp reduction seen by next June (vs July prior to today's meeting), and nearly 75bp of total cuts by end-2024 (up about 10bp vs Weds).
- BoE terminal Bank Rate pricing -3.1bp to 5.59% (34bp of further hikes left in the cycle to Feb 2024): The perception that the ECB's hike today marked a top to the cycle added to speculation that the BoE would also deliver a dovish September hike. There's 19bp (75% prob of a 25bp hike) priced for next week's meeting with 30bp priced cumulatively through the next two meetings. Around 60bp of cuts are seen between the peak in Q1 2024 and end-2024.
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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