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AUSSIE 10-YEAR TECHS

(U2) More Stable But Still Fragile

USDCAD TECHS

Trend Structure Remains Bullish

US TSYS

Cautious Risk Appetite Gains Momentum

AUDUSD TECHS

Key Support Still Exposed

US STOCKS

Late Equity Roundup: 2W Highs

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STIR FUTURES
  • Fed hike expectations firmed further today, with Fed Funds futures now pricing in 205bp of tightening to come over this year's six meetings (i.e. more than 225bp for the year) - this is up more than 30bps since before Powell spoke on Monday.
  • The trigger was potentially a combination of Citi's aggressive rate call change as well as Interfax headlines afterwards that Russia will focus on the complete liberation of Donbas, with the potential implication of a scaled back conflict.
  • Citi now call for a total of 275bp of hikes this year, with four consecutive 50bp hikes in May-Sep, which leaves rates at 2.75-3.0% at the end of 2022.
  • Pricing for immediate meetings see May firm slightly to 45bps and June pick up to 87bps, implying a 64% chance of 100bps of hikes over two meetings but also with a 14% chance of 125bps of hikes.

FOMC-dated Fed Funds futures cumulative hikesSource: Bloomberg

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