🏦🔻Fed-ECB Spread Compressing Below 100Bps By December: Cable FX Macro

**As seen in Macro Walk report 04/14/23, subscribe at cablefxm.co.uk/reports

• Our Macro Walk report is flagging a squaring of easing bets, central banks were repriced back in mid-March and expectations of lower rates were built

• Analysts' desks had warned that the rate cut pricing was too aggressive, the calendar penciled the last Fed hike and first cut within less than 6-months from each other

• As of now, the OIS curve sees an additional 25bps of tightening from the Fed and 75bps of rate cuts by January

• The market is currently pricing a more aggressive easing stance from the Fed than from the ECB. The implied rate curve is expected to compress, with rate spreads falling below 100bps by December and reaching 77bps by January. The compression is evident when comparing to the 140bps spread back in early March