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Creeping Market-Implied ECB Rates Drags Single Currency Higher

EUR
  • A little more on the EUR move across European hours - EUR/USD is now testing 1.0950 and EUR/GBP has topped 0.86 with the single currency stronger against all others in G10.
  • Modest strength comes alongside the creep higher in ECB market-implied policy expectations: ECB-dated OIS terminal pricing has now edged back to 4.00% in deposit rate terms as Kazaks, Simkus retained a hawkish bias.
  • In futures space, participation has been somewhat low - cumulative EUR futures volumes sit just below average for this time of day, with relatively little uptick in activity following the opening Sintra remarks from ECB's Lagarde - despite her somewhat hawkish overtones.
  • Focus for EURUSD turns to 1.0959 initially ahead of 1.0973 - the 76.4% retracement for the Thurs-Fri leg lower from last week.

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