Euribor Off Lows Alongside Bunds, OIS Moves Towards Pricing A Further 50bp Of '24 ECB Cuts

Euribor futures move away from lows alongside Bunds.

• That leaves contracts +2.0 to -2.0, with the whites outperforming.
• ECB-dated OIS sees light dovish moves.
• A little over 80% odds of a 25bp cut are priced through the Sep ECB decision, with ~47bp of easing priced through year end.
• Continued uncertainty surrounding French politics and mixed Chinese economic activity data dominate the headlines, but French equity index futures have rallied a little and EGB spreads to Bunds are generally tighter.
• RTRS & BBG sources have played down the likelihood of OAT intervention from the ECB.
• Weekend ECB-speak continued to underscore data-dependence.
• Vujcic pointed to the need for lower inflation to cut rates by the end of the September meeting, while Kazaks stressed the need to reduce inflation.
• Today will see the release of final Q1 labour cost data from the Eurozone, along with final Italian CPI readings.
• We will also hear from ECB’s Lagarde, de Guindos, Lane & Makhlouf.