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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.
STIR
ECB-dated OIS generally moves higher on Monday, with the direction of travel for core global FI markets and then a recent, hawkish address ( https://www.ecb.europa.eu/press/key/date/2023/html/ecb.sp230619_1~2c0bdf2422.en.html ) from ECB Executive Board member Schnabel, which warned against the risks of underestimating inflation given recent history, in addition to outlining her preference to err on the side of doing too much vs. too little re: policy tightening, at the fore.
- That leaves ECB terminal rate pricing just above 3.95% in deposit rate terms, with ~22bp of tightening priced for the July gathering. Messrs Lagarde & Lane have already alluded to the likelihood of another rate hike before the summer break.
- Elsewhere, Governing Council member Simkus reaffirmed the general view i.e. backing a hike in July but stressing the Bank’s data-dependent stance when it comes to September, as did fellow Governing Council member Kazimir.
| ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Hike-Adjusted €STR Rate (bp) |
| Jul-23 | 3.616 | +22.2 |
| Sep-23 | 3.793 | +39.9 |
| Oct-23 | 3.843 | +44.9 |
| Dec-23 | 3.854 | +46.0 |
| Jan-24 | 3.831 | +43.7 |
| Mar-24 | 3.757 | +36.3 |
| Apr-24 | 3.675 | +28.1 |
Note that the above table assumes a 25bp adjustment vs. the most recent €STR overnight rate levels, fully passing through last week’s 25bp ECB rate hike.
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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