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What's priced in?

ECB
  • In terms of market pricing for the ECB, there is currently around 49bp priced for the March meeting, 85bp cumulatively by May, 110bp by June, 126bp by July and then a peak of 137bp by December.
  • So effectively to get to the 126bp by July the ECB would need to deliver 50bp in March and then one 50bp and two 25bp in the May/June/July meetings.
  • As we noted yesterday, two and a half weeks ago we were looking at a terminal rate around 100bp higher than now by September before the curve inverted. So we are effectively now pricing in 1.5 more 25bp hikes than previously this year, and with no curve inversion until 2024.

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