Massive reprising of inflation and front-end rates. Markets expect weaker labour markets and lower inflation will push central banks to open the door to rate cuts in 2024 at next week’s meetings. The front-end repricing has been massive. Almost six rate cuts are priced for the ECB in 2024 with ~85% risk of the first cut by March and ~85% risk of two cuts by April. Almost two full rate cuts have been priced in within the last week. Let’s put it this way. A few more low inflation prints and weaker labour market prints are required for current market pricing to be realised. As a short-term tactical bet, we suggest to ... (full story)