ECB Hawks Note Rate Cut Possible Within Next Few Meetings

Euribor futures have moved higher alongside global core FI, as some of the more hawkish-leaning Governing Council members concede that an ECB rate cut is possible at the next few meetings.

• Contracts are +0.5 to +3.0 ticks higher, but still within yesterday's ranges.
• Governing Council members Wunsch (after hours) and Kazaks (this morning) did not assign a timeline for the first rate cut, but their comments appear consistent with recent comments from ECB hawks re: a potential cut in June.
• GC centrist Villeroy also noted that a June cut was more likely than in April.
• ECB-dated OIS price 96bps of cuts through the remainder of '24 and 23bps through the end of the June meeting, after the degree of cuts priced moderated yesterday.
• The ECB is set to reveal the outcome of its operational framework review later today. See our preview here.
• Elsewhere, comments from ECB GC members Cipollone (1145GMT/1245CET) and Stournaras (1400GMT) are scheduled.