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Upward pressure

STIR FUTURES
  • A little upward pressure this morning seen across STIR futures across the world, but little in the way of specific drivers.
  • The SONIA strip has seen the biggest move this morning, with Reds up to 8.5 ticks higher this morning, continuing on from the post-BOE rally yesterday. Markets now price around 34bp for the May meeting (despite no MPC members voting for more than 25bp at yesterday's meeting). 100bp of hikes are fully priced by September, with 121bp priced by end-2022. This is all in addition to the 50bp of hikes we have already seen this year. We still think there is too much priced into the SONIA curve.
  • The Eurodollar strip has seen the biggest moves in the Greens today, up to 3 ticks higher. Markets also price around 34bp for May with 162bp priced for 2022 as a whole (in addition to the 25bp hike seen this week).
  • The Euribor strip also up to 3 ticks higher through Reds/Greens with 10bp priced by July, but pricing for September has moved from being fully priced yesterday morning to 20bp today with 42bp priced by year-end (down from around 48bp).

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