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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.
EURO SUMMARY
- Of course, there is a lot more going into the ECB policy decision than the 5y5y inflation swap, but with a symmetrical inflation target there should be less pressure for the ECB to react to nearer-term inflation overshoots. And with market-based inflation expectations still below target, it doesn't appear the ECB will be too concerned about inflationary pressure.
- So where does this leave the Euribor strip? The moves seem to be more driven by external factors than any concerns about inflation in the Eurozone getting out of control. And the ECB is large enough it doesn't really need to respond to the Fed or BOE hiking rates. It can go on its own cycle.
- So in our view, the moves in the Euribor strip seem out of sync with 5y5y forward inflation swaps. Either inflation expectations should be picking up more or the ECB will likely keep accomodative policy for longer and the moves in the Euribor strip are an overreaction.
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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