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Lagarde Needs Further Reassurance Before Easing Again, ~40bp Of Cuts Priced Through Dec

STIR

Euribor & ECB-dated OIS little changed on the day. The latter shows 18bp of cuts through Sep & ~39bp of cuts through Dec. No impact from soft German industrial production data

  • ECB President Lagarde stuck to script late Thursday, stressing the need for further reassurance that inflation is moving back to target.
  • Elsewhere, she noted that while the ECB could adjust policy at any meeting, some meetings are accompanied by increased information. This will leave participants focused on once a quarter rate cuts, centred on meetings accompanied by updated economic projections.
  • Lower tier eurozone data is due today, with U.S. NFPs dominating the calendar.
  • ECB speak due from Lagarde, Elderson & Nagel, but shouldn’t be market moving.
ECB Meeting€STR ECB-Dated OIS (%)Difference Vs. Current Effective €STR Rate (bp)
Jul-243.659-0.4
Sep-243.484-18.0
Oct-243.426-23.7
Dec-243.271-39.2
Jan-253.202-46.1
Mar-253.074-58.9
Apr-253.015-64.8
Jun-252.908-75.5

Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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