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Back Toward 100bps of ECB Cuts Through 2024


2024 ECB cut pricing moves back toward 100bps, as core EGBs and the Euribor strip remain close to intraday highs. Today's hawkish extreme was around 90bps of cuts through the remainder of the year, with the latest moves bringing 2024 pricing back toward Wednesday's closing levels.

  • Bank of Greece Governor Stournaras provided a similar rhetoric to Simkus in acknowledging an ECB rate cut in April is unlikely.
  • He currently sees the first ECB rate cut in June, which unsurprisingly puts him amongst the more dovish contingent of the Governing Council.
  • Meanwhile, Bundesbank's Nagel added that he was comfortable with current market pricing of the easing cycle.
  • Summing up today's ECB speak, we don't think any new signals have been provided on the path for policy. A March cut is out of the question with an April move unlikely. June remains the most likely meeting for the ECB to begin considering easing, but this will be contingent on how the totality of the data leading up to the meeting shapes up.
  • We would highlight the following slide title from Schnabel's speech earlier: "Economy is bottoming out as peak of transmission may have been reached". The lagged impact of past tightening may provide another reason for the ECB to delay the start to its easing cycle as the weighing effect of policy on demand is reduced.

Meeting Date ESTR ECB-Dated OIS (%)Difference Vs. Current Effective ESTR Rate (bp)
Source: MNI/Bloomberg

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