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Short end under heavy pressure, continued reaction to FOMC's hawkish hold annc'd Wed, Eurodlr Whites (EDH2-EDZ2) pricing in 125-150bp in rate hikes by yr end, another 50bp in 2023. Hopefully we'll get more insight on "sooner, faster" asset reductions with the Fed out of media blackout, but no speakers scheduled as yet.
  • Lead quarterly EDH2 remains under pressure (-0.040 at 99.450) after latest 3M LIBOR set' surged +0.01757 to 0.31657% (+0.05886/wk) -- new highest level since May 2020. Whites-Golds (EDH2-EDZ6) currently -0.020-0.040.
  • Starting to price in more than 100bps total hikes for 2022 since Wed's FOMC: EDH2 starting to price in chance of 50bp hike while Jun'22 50bp hike near fully priced in.
  • Trading desks watching Tsy 7s10s yield curve: nearly inverting Thu after decline from around 5 after FOMC, currently at 2.289 (-.357), desks see inversion as trigger for selling stocks (SPX eminis currently -31.0 at 4286.75). Otherwise, short end yld curves steeper in short end, 5s30s near steady at 43.29.
  • US$ firmer vs. EUR (1.1121 multi-year low), Gold adding to Thu's sale currently around 1787.5, West Texas crude above 87.00 at 87.23.
  • Overnight flow, trading desks report two-way w/better selling from fast$ accts in short end, real$ out the curve.

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