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Hike Pricing Jumps And EUR Near 1.10 As Holzmann Eyes May 50bp Hike

ECB

ECB hike pricing heads to session highs and EUR nearing 1.10 vs USD on comments by Austria's Holzmann in Borsen Zeitung coming over the wires, citing a need to keep hiking "noticeably beyond May" with him saying the persistence of inflation argues for another 50bp hike in May.

  • A 50bp hike is now seen at about 10% probability for May, vs basically zero coming into the session.
  • Terminal Depo rate pricing +5.8bp on the day to 3.72%, but had spiked as high as 3.76% (a 25bp reversal from session lows post-US CPI).
  • Both of those would be post-March 10 highs implying over 70bp of hikes from current levels.

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