STIR: SNB Pricing Off Dovish Post-Decision Extremes
Mar-21 11:31
SNB-dated OIS moves away from dovish session extremes and stabilises around pricing ~45bp of cuts over the 3 remaining ’24 meetings. ~20bp of cuts are now seen through the June meeting i.e. 80% odds of a follow up 25bp cut are now priced.
- The lack of firm forward guidance re: further cuts allowed the move away from dovish session extremes.
- Vendor price feeds were erratic around the decision and have been adjusted to show dovish extremes of ~60bp ’24bp of cuts vs. closer to 70bp earlier.
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EURIBOR OPTIONS: Put fly buyer
Feb-20 11:30
ERM4 96.25/96.00/95.75p fly, bought for 4 in 6.6k.
BOE: What have we learnt from the TSC so far?
Feb-20 11:27
- Overall we have learnt little new from Bailey, Dhingra or Greene relative to their comments last week.
- The most notable news is that Broadbent said in his annual report that the MPR forecast "doesn’t rule out a policy easing at some point this year." He elaborated little more on the timing, but this was still enough to help SONIA futures outperform over the past hour with a flattening of the Whites and Reds / longer through the curve up to 8.5 ticks higher today (versus Euribor futures up to 3.5 ticks higher and SOFR futures up to 5.0 ticks higher).
- In terms of meeting-by-meeting pricing, markets now price around 4bp of cuts for May, 14bp cumulatively by June, 30bp by August and 74bp by year-end.
- The MNI Markets team looks for the probability of a first cut in May further to around 15%, a 30% probability of a first cut in June, a 40% probability of a first cut in August and a 15% probability of the first cut being delayed further.
- So market pricing is currently pricing slightly more in terms of the first cut, but we think that market pricing by year-end is looking broadly appropriate.
- Bailey also said that the Bernanke report is due in April (more specific than the Spring commitment previously noted).
MNI EXCLUSIVE: Shipping Data Assuages Red Sea UK Inflation Fears
Feb-20 11:17
MNI looks into the implications of shipping delays for UK inflation - On MNI Policy MainWire now, for more details please contact sales@marketnews.com
