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Under a little pressure this morning

STIR FUTURES

Downside pressures on STIR markets this morning with Euribor and SONIA futures leading the way lower (underperforming the Eurodollar strip).

  • Markets are back to fully pricing a September 25bp ECB hike with 56bp priced by year-end. Euribor Reds and further out the curve have seen bigger moves than Whites with most of the strip down 5.5 ticks.
  • SONIA futures have also moved lower this morning, with Reds and Greens generally down 3.5-4.0 ticks today. Despite this market pricing, the May meeting is now priced at 29bp (down from the 30bp+ we have seen recently) but the market still prices 55bp for June, 125bp for November (5 meetings) and 150bp by February.
  • The Eurodollar curve is down 3 ticks through Whites and Reds this morning. Markets now price 45bp for the May meeting, 127bp for the July meeting (3 meetings) and 214bp by year-end.

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