One chart: Traders weigh bigger Fed rate hike in March

While a quarter-point increase is still the most likely scenario, swap markets are now pricing in more than 25 basis points of tightening by the end of March. The Fed hasn't tightened that much in one shot since May 2000, when its tightening cycle was already well underway.

In the enurodollar market, strategies that protect against Fed hikes have been in demand, with options volumes running at higher than usual levels.

Positions have notably amassed in the June options contract, which stand to pay-out should the Fed lift rates by 50 basis points at the March meeting.

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