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Fed Hike Expectations Pull Back In European Hours

STIR FUTURES
  • Fed hike expectations have dipped through European hours on broader risk-off moves, with FOMC-dated Fed Fund futures slipping from a high of 219bp overnight to 214bp.
  • There was a similar move in front-end Tsy yields, with 2YY moving off new highs of 2.49% to sit at 2.45%, in turn trimming inversion after both 2s10s and 5s30s touched new lows on open.
  • Immediate meetings are more subdued, with 45.5bps for May (as much of last week) and 89bp for June (seen after payrolls was in line, removing a potential obstacle for aggressive hikes).
  • Little of note scheduled for today with only finalised durable goods at 1000ET. Brainard kickstarts the week’s Fedspeak tomorrow.

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