STIR: 115bp Of ECB Cuts Priced for '25

ECB-dated OIS ~1bp more hawkish to ~3bp more dovish than levels seen late last week, although contracts remain within multi-week ranges.

• 27bp of cuts priced for this month’s meeting, 59bp of cuts then show through March, 98bp through June and 115bp through December.
• The latest move higher in European natural gas prices has probably had a marginally hawkish impact on near-dated ECB meeting pricing in recent days.
• Euribor futures are +1.0 to -2.0.
• Several rounds of ECB comments were seen over the Christmas through New Year period, although none of it was particularly market moving:
• President Lagarde stressed her hope that ’25 will be the year that the ECB attains its inflation target.
• Stournaras (usually dovish) noted the need to continue with “gradual” interest rate cuts, although left the door open to bigger moves “if incoming data suggest below-target inflation over the mediumterm.”
• Meanwhile, GC hawk Holzmann suggested that the Bank could consider waiting longer before cutting rates if inflation risks stemming from energy prices or a stronger depreciationof the euro become apparent.
• Final manufacturing PMIs from the Eurozone, Germany & France are due this morning, along with the equivalent readings from the periphery.
• Further afield, U.S. weekly jobless claims data will be eyed.
• No major central bank speakers are scheduled today.