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Pre-NFP Stir Update: 85bp Of Cuts To Year-End

STIR FUTURES
  • Ahead of NFP, Fed Funds implied rates have pushed higher through European hours to continue yesterday’s bounce off lows, but remain compressed vs recent weeks with the latest flare up of banking pressures.
  • Currently showing a 2bp cut for Jun, a cumulative 13bp cut for July, Wednesday’s hike more than fully reversed in Sep (-33bps) and building to 85bp of cuts to 4.23% in Dec.
  • The latter is off latest lows that exceeded 100bp of cuts to year-end yesterday, and at 4.23% compares with lows of circa 3.5% in mid-March after spillover to Credit Suisse and recent highs of 4.65% in the week ahead of First Republic’s Q1 results.
  • See a range of analyst views for NFP, AHE and the u/e rate on pg 2 here: https://roar-assets-auto.rbl.ms/files/52760/USNFPMay2023Preview.pdf

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