MNI China Daily Summary: Friday, February 28

MNI: EU Seeks To Avoid Stigma From Fiscal Opt Outs For Defence

MNI BRIEF: Consumer Inflation Outlook Slows - ECB Survey

MNI BRIEF: Xi Calls For Greater Consumption To Boost Demand

MNI BRIEF: China To Fight Against Extra U.S. Tariffs: MOFCOM

MNI BRIEF:China's Politburo Eyes More Proactive Macro Policies

MNI: GERMANY NRW FEB CPI +0.4% M/M, +1.9% Y/Y

MNI: BADEN WUERT FEB CPI +0.5% M/M, +2.5% Y/Y

MNI: BAVARIA FEB CPI +0.4% M/M, +2.4% Y/Y

GERMANY: Official Interim Election Results Tilt Towards Missing BSW & FDP

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

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STIR: 3.5 ECB Cuts Priced Through Year-End, Flash Inflation Data Eyed

STIR
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Dovish moves in ECB-dated OIS as trade war worry continued to support core global FI markets overnight.

  • ECB-dated OIS more or less fully discounts a 25bp cut at next month’s meeting, with 62.5bp of cuts priced over the next 3 decisions i.e. 2.5x 25 cuts are priced over that horizon.
  • 87.5bp of cuts priced through year-end vs. closer to 85bp late yesterday.
  • Euribor futures 1.5-3.5 higher.
  • French & German CPI data headline the European calendar today, with the Italian equivalent also due.
  • February’s initial Eurozone inflation data is due to be released on Monday.
  • A reminder that yesterday’s Spanish CPI data was in line to softer-than-expected.
  • ECB consumer inflation expectations data is also due.
  • The ECB has expressed confidence in headline inflation returning sustainably to the 2% target during the course of this year, underscored by an expected deceleration in services inflation on the back of easing wage growth.
  • Services inflation has been stuck around 4% Y/Y since November 2023.
  • In a generally hawkish interview with the FT last week, Executive Board member Schnabel said she expects to start seeing services inflation moderate from February.
  • This will provide the primary focus for markets heading into the releases.

ECB Meeting

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Dovish moves in ECB-dated OIS as trade war worry continued to support core global FI markets overnight.

  • ECB-dated OIS more or less fully discounts a 25bp cut at next month’s meeting, with 62.5bp of cuts priced over the next 3 decisions i.e. 2.5x 25 cuts are priced over that horizon.
  • 87.5bp of cuts priced through year-end vs. closer to 85bp late yesterday.
  • Euribor futures 1.5-3.5 higher.
  • French & German CPI data headline the European calendar today, with the Italian equivalent also due.
  • February’s initial Eurozone inflation data is due to be released on Monday.
  • A reminder that yesterday’s Spanish CPI data was in line to softer-than-expected.
  • ECB consumer inflation expectations data is also due.
  • The ECB has expressed confidence in headline inflation returning sustainably to the 2% target during the course of this year, underscored by an expected deceleration in services inflation on the back of easing wage growth.
  • Services inflation has been stuck around 4% Y/Y since November 2023.
  • In a generally hawkish interview with the FT last week, Executive Board member Schnabel said she expects to start seeing services inflation moderate from February.
  • This will provide the primary focus for markets heading into the releases.

ECB Meeting

Keep reading...Show less