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The news overnight that the Moderna CEO had said that current vaccines would be "much less effective" against the Omicron strain continues to be the dominant theme of STIR markets. News that Germany might bring in a lockdown for the unvaccinated have helped fuel negative sentiment.

  • The Eurodollar strip continues to outperform with Whites up 0.2-7.5 ticks, Reds up 8.0-8.5 ticks and Greens/Blues up 9-11 ticks on the day.
  • The short sterling strip has seen Whites 1.5-3.5 ticks higher with with even a February hike now looking in doubt. Reds, Greens and Blues are all 3.5-5.0 ticks higher on the day.
  • The Euribor strip has seen competing factors - on the one hand the negative news on Omicron. On the other hand more higher than expected HICP data - this time from France. We have now seen German HICP 5 tenths higher than expected, French 2 tenths higher and Spanish HICP in line. The Italian and Eurozone flash HICP prints are both due at 10:00GMT / 11:00CET. Whites are unch to 0.5 ticks higher while the rest of the strip is generally 1 tick higher.
  • With the growing divergence between the Euribor and Eurodollar strips, EURUSD continues to be pushed higher to its highest level since 19 November.