ECB Pricing A Touch Steeper Today, No Lasting Impact From Latest ECB Sources Piece

ECB-dated OIS is little changed to a touch firmer as the strip steepens. That leaves just under 10bp of tightening showing for Sep, with terminal deposit rate pricing showing just above 3.90% i.e. markets still price slightly more than even odds of one further 25bp rate hike in the current ECB cycle.

• There were no lasting dovish impulses from the RTRS sources report pointing to “momentum growing for ECB rate hike pause as growth falters.”
• The lack of meaningful commitment in the story, along with the undertones highlighting the known data-dependent stance of the Bank, meant that any dovish moves were short-lived and limited.
• Oil and equity futures ticking a touch higher, along with EGBs printing a little cheaper, also helped limit any dovish moves.
• Jackson Hole comments from ECB’s Lagarde will be eyed, with ECB’s Kazaks also due to speak today. We remain on watch for any ad-hoc Gov. Council appearances at the event.