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May ECB Pricing Rebounds Post-Holzmann 50bp Hike Comment

STIR
ECB May hike pricing fully rebounded from a 1.5bp drop post-US ISM following Holzmann's comments that a 50bp hike was still "on the cards" for the next meeting.
  • Implied pricing returned to 22.6bp (over 90% prob of at least a 25bp hike vs a pause, though at least some 50bp pricing implied in there as well) basically flat on the day but vs a session low of 21.1bp.
  • That knee-jerk move is fading a little, and is terminal pricing still below pre-US data levels at 59bp cumulative by October's meeting, but up 1.4bp on the day, initially buoyed by the OPEC-led jump in oil prices.

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