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Schnabel Notes July ECB Cut Unlikely; Euribor Futures Softer

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Euribor futures are weaker alongside Bunds, currently -0.5 to -3.5 through the blues.

  • Wednesday’s post-U.S. data rally has continued to unwind, with ERZ4 paring all of its related gains.
  • ECB-dated OIS are back to pricing around 70bps of cuts through year-end.
  • Overnight, ECB Executive Board member Schnabel told Nikkei that a July rate cut was unlikely based on current data.
  • This aligns with market pricing, where just 5bps of sequential cuts are priced through the July meeting after 23bps of implied easing through June.
  • Governing Council member Holzmann’s morning comments were in line with his usually hawkish stance.
  • Today sees scheduled remarks from ECB’s Vasle, de Guindos, Vujcic, Holzmann and Kazaks, while Eurozone final HICP headlines the data calendar.


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Euribor futures are weaker alongside Bunds, currently -0.5 to -3.5 through the blues.

  • Wednesday’s post-U.S. data rally has continued to unwind, with ERZ4 paring all of its related gains.
  • ECB-dated OIS are back to pricing around 70bps of cuts through year-end.
  • Overnight, ECB Executive Board member Schnabel told Nikkei that a July rate cut was unlikely based on current data.
  • This aligns with market pricing, where just 5bps of sequential cuts are priced through the July meeting after 23bps of implied easing through June.
  • Governing Council member Holzmann’s morning comments were in line with his usually hawkish stance.
  • Today sees scheduled remarks from ECB’s Vasle, de Guindos, Vujcic, Holzmann and Kazaks, while Eurozone final HICP headlines the data calendar.


Keep reading...Show less