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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
- STIR futures are under pressure this morning following an upside surprise to Chinese inflation data overnight.
- The Eurodollar strip has seen the biggest moves, and inflation really will be in focus today with US CPI data due for release later today. In the Bloomberg survey, economists are fairly evenly split on whether the M/M CPI print will come in at 0.5%, 0.6% or 0.7%. There is also some underperformance of the Eurodollar strip as Powell's odds of remaining Fed Chair appear to have stabilised. Rates at 0.75% are now fully priced in by the end of 2022.
- The short sterling strip has moved lower, and moves have been a little larger in Whites than for Eurodollars, but the rest of the short sterling strip has outperformed the Eurodollar strip. Aside from the Fed Chair odds, part of this short sterling outperformance is likely due to the fact that with CPI already expected to peak around 5% in the UK, data outside of inflationary shocks is likely to be equally market moving for UK markets (such as labour market data and to a lesser extent tomorrow's activity/GDP data). Bank Rate at 1% is now expected by markets around Q3-22 with a move to 1.25% in H1-23.
- The Euribor strip has also moved lower but has seen smaller moves in general. Markets now see a decent chance of a second 10bp ECB hike late 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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