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Free AccessEGBS: Bunds Follow USTs Lower Post ISM, Almost 80bps of ’24 ECB Cuts Priced
Bund futures followed US Treasuries lower after the ISM services index printed a little stronger than consensus expectations.
- Bunds are now +3 ticks today at 135.25, after the early-afternoon rally was unable to push through this morning’s high of 136.28.
- While the ISM reading prompted a modest leg higher in global equity markets, 10-year EGB spreads to Bunds remain comfortably wider today.
- The 10-year OAT/Bund spread sits above 80bps at typing, but still shy of the ~85bps seen in the midst of the French elections in June this year.
- Euribor futures are also off intraday highs, with ERZ5 unable to make a test of the Feb 1 high at 98.005 earlier, now trading -1.0 at 97.810.
- ECB-dated OIS price 78bps of further cuts through the remainder of 2024, even after the dovish Stournaras expressed his expectations for just two more 2024 cuts in an interview last week.
Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
Sep-24 | 3.382 | -28.2 |
Oct-24 | 3.152 | -51.2 |
Dec-24 | 2.884 | -78.1 |
Jan-25 | 2.696 | -96.8 |
Mar-25 | 2.468 | -119.6 |
Apr-25 | 2.365 | -129.9 |
Jun-25 | 2.228 | -143.6 |
Jul-25 | 2.178 | -148.6 |
Source: MNI/Bloomberg. |
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.