ECB Pricing Firms A Touch, Remains Within Recent Range

A firming in ECB terminal rate pricing has been observed today, alongside a rebound in FOMC-dated OIS from yesterday’s late NY levels.

• Still, terminal ECB pricing remains hemmed in the previously established range, showing just above the 3.75% mark. The dated OIS curve is a little steeper on the day, but the moves remain fairly contained, with the liquid contracts little changed to ~5bp higher.
• Preliminary May Eurozone CPI data was softer than the wider consensus (albeit based on a stale survey), including a welcome downtick in the rate of services inflation, and final manufacturing PMI data was generally a touch firmer than flash (excluding the French release)
• ECB speak from Lagarde, de Guindos, Rehn & Knot generally reaffirmed their respective pre-existing lines of thought.
• Typically hawkish comments from ECB’s Kazaks pointed to uncertainty re: the eventual ECB terminal rate, alongside a need to remain at the terminal level for a while after it is reached.
• Comments from Bank of France chief Villeroy and the accounts covering the most recent ECB monetary policy meeting will cross later today.