July 05, 2024 06:40 GMT
Lagarde Needs Further Reassurance Before Easing Again, ~40bp Of Cuts Priced Through Dec
STIR
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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-24 | 3.659 | -0.4 |
| Sep-24 | 3.484 | -18.0 |
| Oct-24 | 3.426 | -23.7 |
| Dec-24 | 3.271 | -39.2 |
| Jan-25 | 3.202 | -46.1 |
| Mar-25 | 3.074 | -58.9 |
| Apr-25 | 3.015 | -64.8 |
| Jun-25 | 2.908 | -75.5 |
Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.
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