ECB OIS Sticks To Established Levels

ECB-dated OIS is little changed to a touch higher, owing to some modest weakness in core global FI markets, although the ECB’s well-trodden rhetoric surrounding interest rates means that pricing is unwilling to move too far from well-established parameters.

• Comments from Executive Board member Schnabel once again failed to firmly close the door on the potential for a further move higher in rates given upside risks to inflation.
• Meanwhile, Governing Council member Herodotou echoed his recent remarks, pointing to monetary policy transmission that is working to tame inflation, while warning on material uncertainty, with a particular focus on energy prices. He also noted that “the liquidity conditions in the euro area banking system is another area to monitor, since it plays a role for transmitting monetary policy and, consequently, affects inflation.”
• Looking ahead, comments from Governing Council members Knot, Vasle, Vujcic & Kazimir will be eyed, although they will start to speak at the time as the U.S. NFP release crosses.