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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.
MARKET INSIGHT
- Continued huge moves on the back of US CPI yesterday in STIR markets have been continued through this morning with SONIA futures the biggest movers on the day (helped by marginally better than expected December GDP data). We have now seen the Sep-22 to Mar-23 SONIA futures contracts move 27 ticks lower since Wednesday's close. Markets are now almost fully pricing 125bp of BOE hikes by August (there are only four meetings so more than 25bp per meeting). March continues to price around a 50% probability of a 50bp hike with 25bp fully priced.
- The moves would seem large were it not for the moves in Eurodollar futures. The Sep-22 contract is down 41.5 ticks since Wednesday's close. There are six 25bp hikes fully priced by November, helped by Bullard's comments last night that he wanted to see 100bp of rate rises by May (note he is a hawk). March also prices a 50% probability of a 50bp hike with 25bp fully priced.
- In Europe, Lagarde was measured in her comments again last night. The Euribor strip is following Eurodollars and SONIA lower, but its mainly the Reds that are moving. 50bp of hikes in 2022 is now fully priced, however, which would bring the Deposit Rate back to 0%.
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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