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Fed Funds Firm On Potential De-Escalation

STIR FUTURES
  • FOMC-dated Fed Funds firm through the London session as risk sentiment improves with equities firming, Treasuries selling off and oil retracing on apparent de-escalation with humanitarian corridors being established and Russia looking to achieve its goals via talks.
  • March pricing sits at 26bps , with 3.5 hikes for June (87bps), five consecutive hikes now fully priced to Sep (126bps) and 159bps for 2022.
  • The latter is close to levels just prior to the Russian invasion and compares to a high of 173bps in the subsequent reaction to last month's US CPI.
  • JOLTS today but the main data focus will be on US CPI for Feb tomorrow.

FOMC-dated Fed Funds hikes (bps)Source: Bloomberg

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