STIR: Euribor Futures Off Overnight Highs As Markets Digest Trump Jawboning
Euribor futures are flat to -1.0 ticks through the blues, having moved away from overnight highs alongside Bunds as markets digest US President Trump’s initial policy actions and verbal rhetoric. Although Trump did not impose any new tariffs following his inauguration, he re-iterated threats against Mexico and Canada and again called for the EU to buy more US energy to avoid future protectionist policies.
- ECB-dated OIS are up to 1bp more dovish through ’25, with ~97.5bps of easing priced through year-end.
- National Bank of Slovakia Governor Kazimir said that a January ECB rate cut is a “done deal” and that “three or four cuts in a row are feasible”. This comes across as quite dovish, with Kazimir usually considered a hawkish-leaning member of the GC.
- He argued that the neutral rate was “probably closer to 2% than to 3%”, aligning with more dovish colleagues such as Villeroy. In December, Kazimir said that “once we reach around 2.5%, we’ll start seriously considering the issue of the neutral rate, and whether we should shift from a restrictive policy to a more neutral or accommodative stance”.
- The German ZEW survey is due at 1000GMT/1100CET, while the dovish Bank of Portugal Governor Centeno is scheduled to speak in a parliamentary hearing at 1100GMT.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jan-25 | 2.675 | -24.5 |
| Mar-25 | 2.433 | -48.6 |
| Apr-25 | 2.266 | -65.3 |
| Jun-25 | 2.118 | -80.1 |
| Jul-25 | 2.068 | -85.1 |
| Sep-25 | 1.998 | -92.1 |
| Oct-25 | 1.977 | -94.3 |
| Dec-25 | 1.945 | -97.4 |
| Source: MNI/Bloomberg. | ||
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TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU WANTS GOVT TO PREPARE FOR NEW US ADMINISTRATION
- TRUDEAU DOESN'T ADDRESS QUESTIONS ABOUT HIS LEADERSHIP
USDCAD TECHS: A Pullback Would Be Considered Corrective
- RES 4: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 3: 1.4537 2.0% 10-dma envelope
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4356 @ 16:56 GMT Dec 20
- SUP 1: 1.4301 Low Dec 18
- SUP 2: 1.4174/4014 20- and 50-day EMA values
- SUP 3: 1.3928 Low Nov 25 and a key support
- SUP 4: 1.3822 Low Nov 6
USDCAD bulls remain in the driver’s seat. While price faded into the Thursday close, the recent breach of 1.4178, the Nov 26 high, confirmed a resumption of the uptrend and this maintains the price sequence of higher highs and higher lows. The latest rally opens 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4174, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Bearish Trend Structure
- RES 4: 0.6550 High Nov 25
- RES 3: 0.6501 50-day EMA
- RES 2: 0.6429 High Dec 12
- RES 1: 0.6337/6396 Low Dec 11 / 20-day EMA
- PRICE: 0.6263 @ 16:55 GMT Dec 20
- SUP 1: 0.6199 Low Dec 19
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
The trend needle in AUDUSD continues to point south and this week’s fresh cycle lows and Wednesday’s sell-off, reinforce a bear theme. The move down maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. The break lower opens 0.6158 next, a Fibonacci projection. Initial firm resistance to watch is 0.6396, the 20-day EMA.
