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STIR: 151bps of ECB Easing Priced Through 2025 Ahead Of Nov Inflation Data

STIR
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ECB-dated OIS price 151bps of easing through the end of 2025, holding onto yesterday afternoon’s dovish repricing. Eurozone-wide flash November inflation is due today at 1000GMT/1100CET, with French data due at 0745GMT.

  • Yesterday, German flash inflation was a little below consensus estimates at 2.4% Y/Y, albeit with core metrics a little sticky. This morning, Dutch inflation was a tenth higher than the (5-strong) consensus at 3.8% Y/Y.
  • Although Banque de France Governor Villeroy made notably dovish remarks yesterday, markets still lean heavily towards a 25bp cut at next month’s meeting (OIS price 29bps).
  • The MNI Policy Team’s latest sources piece suggests the ECB is moving towards dropping its reference to keeping rates “sufficiently restrictive” until it achieves its inflation target. A soft set of November inflation readings would support that case.
  • Euribor futures are flat to +3.5 ticks through the blues, with core FI rallying a little this morning. 

 

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ECB-dated OIS price 151bps of easing through the end of 2025, holding onto yesterday afternoon’s dovish repricing. Eurozone-wide flash November inflation is due today at 1000GMT/1100CET, with French data due at 0745GMT.

  • Yesterday, German flash inflation was a little below consensus estimates at 2.4% Y/Y, albeit with core metrics a little sticky. This morning, Dutch inflation was a tenth higher than the (5-strong) consensus at 3.8% Y/Y.
  • Although Banque de France Governor Villeroy made notably dovish remarks yesterday, markets still lean heavily towards a 25bp cut at next month’s meeting (OIS price 29bps).
  • The MNI Policy Team’s latest sources piece suggests the ECB is moving towards dropping its reference to keeping rates “sufficiently restrictive” until it achieves its inflation target. A soft set of November inflation readings would support that case.
  • Euribor futures are flat to +3.5 ticks through the blues, with core FI rallying a little this morning. 

 

Keep reading...Show less