Free Trial
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.
UK
- Sterling continues to look weak versus the dollar when compared to the 2-year STIR spread and the divergence is growing. There are a couple of possible explanations for this:
- First and most obvious is that US STIR markets are driving UK STIR markets - and FX traders don't actually believe the hikes priced into the SONIA strip (which is roughly looking for Bank Rate at 2.50% in 2-years time with hikes to around 2.9% by the February 2023 meeting and then cuts).
- Second, the dollar is trading at a premium due to risk aversion - and in large part due to risks of a recession.
- An interesting dynamic is that when comparing sterling to the euro, sterling is trading marginally stronger than the STIR spread suggests. Referring to the arguments above, we draw two conclusions: first, that the FX market also does not believe pricing for the ECB, and second this gives us even more confidence that the dollar is trading at a premium due to recession risks.
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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok