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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
STIR
US STIR firmed ahead of the weekend as economic data beat expectations and large bank earnings came in better than expected. Hawkish comments from the Fed’s Waller and a surprise jump in near-term UoM inflation expectations added additional pressure.
- At the close FOMC dated OIS was 6-14bp firmer for meetings beyond May with December leading. May FOMC pricing attached an 82% chance of a 25bp hike with terminal rate expectations at 5.09% (June).
- CA STIR firmed 2-10bp across meetings. Interestingly, pricing for meetings out to September now sits above the overnight rate of 4.5%. At last week’s decision meeting, the BoC left policy unchanged but removed the language suggesting that they were likely done with rate hikes. They also kept a phrase indicating a potential increase to address inflation.
- RBA-dated OIS pricing has a 28% chance of a 25bp hike in May with a cumulative 12bp of tightening priced by August. Year-end easing expectations have been scaled back to 11bp versus 29bp ahead of the Easter holiday.
- RBNZ-dated OIS has 20bp of tightening priced for the May meeting with 24bp of easing priced for Nov-23 off a terminal OCR expectation of 5.49% (July).
Figure 1: $-Bloc STIR: Terminal Rate Expectations & Year-End Pricing
Source: MNI – Market News / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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