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Fed Hikes Cool Intraday But Firmer Since Friday

STIR FUTURES
  • Hikes implied by FOMC-dated Fed Funds cooled through the European morning as S&P e-minis have fully unwound a move higher after open, with a modest upward revision in the Eurozone service PMI having little impact.
  • Having ground higher with the US out yesterday, hike expectations have firmed since late Fri, with 71bp for Jul 27 (+2bps), 124bp for Sep (+2.5bps) and 176bp for Dec (+3bps).
  • Similar trend with the peak of 3.38% (180bp of hikes) at the early Feb meeting, nudging up from late Fri but still at the low end of the recent range.

Cumulative hikes implied by FOMC-dated Fed Funds futuresSource: Bloomberg

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  • Hikes implied by FOMC-dated Fed Funds cooled through the European morning as S&P e-minis have fully unwound a move higher after open, with a modest upward revision in the Eurozone service PMI having little impact.
  • Having ground higher with the US out yesterday, hike expectations have firmed since late Fri, with 71bp for Jul 27 (+2bps), 124bp for Sep (+2.5bps) and 176bp for Dec (+3bps).
  • Similar trend with the peak of 3.38% (180bp of hikes) at the early Feb meeting, nudging up from late Fri but still at the low end of the recent range.

Cumulative hikes implied by FOMC-dated Fed Funds futuresSource: Bloomberg