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STIR: 125bp Of Cuts Priced Over Next 5 ECB Decisions

STIR
BulletMarketsFixed Income BulletsForeign Exchange Bullets

Little net movement in EUR STIRs since settlement, with no major spill over from the recently released UK labour market data.

  • ECB-dated OIS broadly in line with pricing seen this time yesterday, showing 29.5bp of cuts for December 62bp of cuts through January, 92bp of cuts through March and just under 125bp of cuts through June.
  • That means the market is essentially fully pricing 5x 25bp cuts over the next 5 meetings, albeit with risks of a 50bp move evident in pricing covering the next 3 decisions.
  • Euribor futures flat to -1.0.
  • Final German CPI data matched preliminary estimates.
  • German ZEW data due today, providing the first sentiment reading since the German government breakdown.
  • ECB speak will come from Rehn, Centeno, Holzmann and Cipollone, with Rehn looking the most likely to touch on ECB monetary policy matters. The others may not cover the Bank’s policy path and matters surrounding it, given the topics of their respective addresses.

ECB Meeting

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Little net movement in EUR STIRs since settlement, with no major spill over from the recently released UK labour market data.

  • ECB-dated OIS broadly in line with pricing seen this time yesterday, showing 29.5bp of cuts for December 62bp of cuts through January, 92bp of cuts through March and just under 125bp of cuts through June.
  • That means the market is essentially fully pricing 5x 25bp cuts over the next 5 meetings, albeit with risks of a 50bp move evident in pricing covering the next 3 decisions.
  • Euribor futures flat to -1.0.
  • Final German CPI data matched preliminary estimates.
  • German ZEW data due today, providing the first sentiment reading since the German government breakdown.
  • ECB speak will come from Rehn, Centeno, Holzmann and Cipollone, with Rehn looking the most likely to touch on ECB monetary policy matters. The others may not cover the Bank’s policy path and matters surrounding it, given the topics of their respective addresses.

ECB Meeting

Keep reading...Show less