Euribor Strip Pressured Post-Fed, Pay-side Flows In ECB-dated OIS

Euribor Whites are down 5.0-6.5 ticks vs yesterday's settlement levels, after Fed Chair Powell pushed back against the potential for a March rate cut last night: "It is probably not the most likely case". This has prompted pay-side flows in ECB-dated OIS contracts, with 144bps of easing priced through 2024 (down from 150bps yesterday afternoon).

• The first full 25bp ECB cut is no longer fully priced through the April meeting, with 21-22bps priced at typing.
• However, it is worth noting that moves further out the strip have been more limited with Greens / Blues 2-3 ticks lower this morning.
• Comments from ECB's Lane yesterday evening were also slightly less dovish than some may have hoped, given his traditional leanings. He noted that the ECB won’t cut rates until they "are more confident that we are on our way back to 2%”. We hear from Lane again today at 1130GMT/1230CET, in a public lecture on "Monetary Policy and Inflation".
• Today's regional docket is highlighted by the Eurozone-wide flash inflation print, while January's manufacturing PMIs, the Bank of England decision and the US ISM Manufacturing survey will also garner interest. Comments are also scheduled from the dovish ECB's Centeno at 0915GMT, though his speech topic is on the Portuguese banking system.