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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
STIR
After the surprise hikes from the RBA and BoC this week, AU & CA STIR have firmed further with more than an additional 25bp of tightening priced into both markets.
- The lift in US jobless claims overnight softened projected Fed rate hike chances over the next three meetings. FOMC-dated OIS pricing attaches a 27% chance of a 25bp hike next week, with July and September receding to a cumulative chance of 80% and 68% respectively.
- Overnight, BoC Deputy Governor Beaudry raised several concerns. These included the potential reversal in core inflation, the durability of household spending, and the possibility that the neutral interest rate for CA has surpassed post-pandemic levels and could continue to rise further.
- The RBNZ is further along the global rate hiking journey, with the 5.50% OCR still well above the expected terminal rates elsewhere in the $-Bloc. Consequently, the RBNZ arguably faces a higher threshold for future rate hikes.
Figure 1: $-Bloc STIR: Terminal Rate Expectations & Year-End Pricing
Source: MNI – Market News / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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