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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
STIR
ECB-dated OIS shows terminal rate pricing just above 3.85% as the feedthrough from the FOMC meeting and dot plot biases pricing a touch higher ahead of today’s decision in Frankfurt. Note that we haven’t seen terminal rate pricing close above 3.85% (in deposit rate terms) since late May.
- The strip is higher and steeper when compared to closing levels after the 4 May ECB decision.
- The outcome of the ECB’s impending policy decision has been well-telegraphed: the deposit rate will almost certainly increase by 25bp (an outcome that is essentially fully priced) and the previous decision to end APP reinvestments in July will be confirmed.
- The communication since the May meeting indicates that the dovish members concede that there is still some room to raise rates, while the more hawkish members are no longer calling for larger hikes (50bp+).
- Continuing to hike by a more modest 25bp is the compromise position that the GC seem to be aligning around.
- See our full preview of the event here.
| ECB Meeting | €STR ECB-Dated OIS (%) | €STR ECB-Dated OIS At Close On 4 May '23 (%) |
| Jun-23 | 3.395 | 3.338 |
| Jul-23 | 3.604 | 3.457 |
| Sep-23 | 3.734 | 3.535 |
| Oct-23 | 3.761 | 3.515 |
| Dec-23 | 3.754 | 3.441 |
| Jan-24 | 3.724 | 3.349 |
Source: MNI - Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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