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Modest Increase In Fed Hike Expectations On Minutes

US EURODLR FUTURES
  • Modest increase in Fed hike expectations as the minutes are digested.
  • Eurodollars implied yields firming 3-3.5bps across the curve but small compared to the now 17.5bp increase in the red/green packs. It still leaves the curve heavily inverted through 2023 though - chart.
  • Separately, FOMC-dated Fed Funds futures firming 2bps from November onwards but well within the day’s range, with a cumulative 173bp of hikes priced for Dec’22. The peak is now seen at 3.37% in Mar’23 with 55bps of inversion to end-2023.

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