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Short sterling starting to pull Euribor lower

STIR
  • Short sterling Whites now down 9-10 ticks (driven by Saunders weekend comments - see previous bullets). Reds down 7.5-8.0 tickets and the rest of the curve down 6-7 ticks. As noted earlier 15bp hike fully priced for December 2021, with hikes to 1.00% almost fully priced by end 2022 now.
  • Euribor now getting pulled lower too, with the Dec22 contract down 4 ticks to now fully price in a 10bp hike by the end of 2022. Reds/Greens down 4-6 ticks.
  • Eurodollar strip also down by up to 5 ticks in the Greens.

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