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US CPI Has Minimal Net Impact On BoE And ECB Pricing

STIR

European central bank rate hike pricing changed little Thursday after an as-expected US CPI report pushed Federal Reserve hike pricing lower (most noteworthy, 3bp priced out of the Feb FOMC, to just under 28bp).

  • ECB: 48bp is currently priced for Feb's meeting and 91bp for cumulative hikes through the March meeting, unchanged vs before US CPI - the 141bp of total hikes in the path to a July peak didn't change much, though had jumped a few bp higher despite the broader dovish move.
  • BoE: 43bp is priced for Feb's meeting (44bp priced pre-CPI) and 74bp cumulative through the Mar meeting (vs 73bp pre-CPI); terminal still seen in Aug after 96bp of hikes.

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