Euribor Strip Slightly Firmer, But Lagging SONIA

The Euribor strip is flat to 2.0 ticks higher through the Blues as global core FI markets recover from Asia-Pac session lows. SONIA performs slightly better, sitting flat to 6.5 ticks higher vs yesterday's settlement levels, with dovish impulses from the lower-than-expected UK CPI yesterday still providing support.

• The sharp program-driven sell-off in US equities just before the US close yesterday also provided a tailwind to USTs into the close, and is providing further support to core FI this morning.
• After hours yesterday, EU Finance Ministers agreed on a fiscal deal for 2024 (see here: https://marketnews.com/policy/central_bank/mni-brief-new-fiscal-rules-ready-for-2025-eu-fiscal-guidance and here: https://www.ft.com/content/62b70a23-ed5b-4cb2-b760-76aa9cc31180). The measures still need to be agreed in the EU Parliament next year.
• ECB-speak has continued to push back on rate cut pricing, with de Guindos this morning noting talk of rate cuts is "premature".
• Markets remain unfazed however, with ECB-dated OIS contracts pricing 163bps of cuts through 2024, and BoE counterparts pricing 146ps - both around recent dovish extremes.
• Today's domestic dockets are light, with headlines and year-end flows likely to dominate.