Post-LIBOR Settle Update: Forward Hike Guidance Eases

Lead quarterly EDU2 trades +0.020 at 96.585 after latest 3M LIBOR set' recedes -0.01671 to 2.76629% (+0.02872/wk).

• Rate hike expectations of 75bp next week holding steady while forward guidance through year end adds to Thursday's moderation w/ balance of Whites (EDZ2-EDM3) trades +0.060-0.100, Reds through Golds (EDU3-EDM7) +0.125-0.085, Gold lagging.
• Front end inversion rebounds: Dec'22/Mar'23 at -0.210 vs. -0.140 yesterday. Most inverted calendar spds: EDZ2/EDZ3 at -0.735, EDH3/EDH4 at -0.645. Inversion starts to flatten out in Green Jun'25 vs. Blue Sep trading +0.020.
• Thursday roundup: chances of more aggressive rate hikes in the latter half of the year started to fade as data turns weak. Tsys held near session highs after initially selling off after the ECB hiked 50bp. Brief post-ECB hike sell-off in Tsys saw 30YY hit 3.2035% high. Tsys bounced on weak US data soon after: weekly jobless claims higher than expected at 251k vs. 240k, continuing claims 1.384M vs. 1.340M est, sharp miss on Philly Fed Mfg index at -12.3 vs. 0.8 est.
  
• Carry-over weakness this morning after France and Germany mfg PMIs both missed expectations, contractionary sub-50 reads at 49.6 and 49.2 respectively. Trading desk speculate the ECB would likely have hiked 25bp instead of 50bp if the French and German PMIs had come out prior to rate annc.