###POV: The very short-end of the Eonia.......>

EONIA: ###POV: The very short-end of the Eonia curve continues to remain

extremely flat, pricing in only a 3% chance of a 10bp deposit rate hike in

December and only a 6% of a hike in March 2018, according to MNI PINCH

calculations. While further out the chance of a 10bp rate hike in September 2018

has fallen to 47% from 91% seen just after Jul 20 GC meeting and 1y1y Eonia has

broken back below -0.26%.

- With ECB president Mario Draghi scheduled to deliver a key-note speech in

Lindau, Germany on Wednesday and then 2-days later at the Jackson Hole

conference on Friday evening, the risk for the curve to flatten further appears

very limited, while any mention of QE taper or suggestion of easing of monetary

policy accommodation could steepen the Eonia curve, especially for the second

half of 2018.

- The Sep 2018 ECB forward dated Eonia is currently seen at -0.31%, just above

1-month low of -0.321% seen on Aug 14, but way below 1-month high of -0.263%

seen on Jul 25.