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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.
STIR FUTURES
- Yesterday we asked the question whether the beta on SONIA futures had fallen given that the strip was being affected by external factors as much as the Euribor strip (as opposed to seeing larger swings as had been the case previously). We asked whether this indicated whether we were reaching a tipping point in terms of having so much priced in, that the strip would not be as responsive going forward.
- The market seems to have heard our question and today is providing an answer. The SONIA strip is underperforming the Euribor strip following this morning's UK labour market data. The data were largely in line to slightly better than expected but are unlikely to sway any MPC member one way or another at the February meeting. However, SONIA Reds, Greens and Blues have seen the data as a signal to move lower, even with the risks of tomorrow's CPI print to come.
- UK markets now comfortably fully price four 25bp hikes by November with the February hike now over 90% priced.
- Euribor futures, meanwhile, have seen little follow through today and continue to price just under two 10bp hikes in 2022.
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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