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Euribor Strip Either Side Of Unchanged, ECB Cuts Continue To Pull Back

STIR

The Euribor strip sits either side of unchanged Monday morning, with Reds 0.5 to 1.5 ticks higher and Blues -0.5 ticks lower to 1.0 ticks higher.

  • Previously noted BoJ headlines prompted an initial knee-jerk upwards in JGB futures but did not meaningfully affect the strip, which remains off today's best levels.
  • On Friday, EU finance ministers failed to agree a deal on fiscal rules. The FT reported that this week's meeting EU leaders meeting in Brussels may help build momentum for a deal, however other heavily debated issues (r.e: Ukraine membership, 2024 budget top-up) may take precedent.
  • ECB-dated OIS contracts indicate 0bps priced for Thursday's ECB meeting and 134bps of ECB cuts by December 2024. There are 15bps and 35bps of cuts priced for the March and April meetings respectively - all below levels seen following the strong US labour market report on Friday.
  • Today's docket is very light, with no notable data to flag. Focus remains on the ECB decision on Thursday, where any talk on PEPP reinvestment/pushback on rate cut pricing are the main areas of interest.

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