EUR & GBP STIRs Look Elsewhere For Cues As Strips Steepen

With little in the way of domestic catalysts to go off, EUR & GBP STIRs seem to have taken their cues from Australian and U.S. data, resulting in the contracts running little changed to firmer on the day, as both strips steepen.

• Liquid ECB-dated OIS contracts are little changed to 5bp firmer, leaving a 25bp hike at next week’s meeting fully priced, with a cumulative ~41bp of tightening showing through September and a terminal deposit rate of just under 4.00% showing.
• Meanwhile, the liquid BoE-dated OIS contracts are flat to 10bp firmer, with a 50bp hike at next month’s meeting 50/50 priced, while terminal rate pricing sits around 5.95%.
• A quick reminder that late on Wednesday we saw BoE’s Ramsden signal support for a careful increase in the pace of QT, while he also noted that inflation persistence is running above levels that the Bank expected in May. He gave very little on the short-term implications of the recent run of data re: monetary policy, sticking to the BoE strap line re: inflation & further tightening.
• Elsewhere, we have published our review of yesterday’s UK CPI data, in addition to a summary of sell-side views.