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STIR: 93% Implied Probability of 25bps ECB Cut On Thursday

STIR
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The ECB are widely expected to cut rates by 25bps on Thursday, reflecting increased concerns around the Eurozone growth outlook (following the weak September flash PMIs) and confidence in inflation returning to target in a timely manner (following the soft September flash inflation data).

  • ECB-dated OIS almost fully price 25bp cuts at the October and December meetings, with 48bps of easing priced through year-end.
  • There are 128bps of cuts priced through the June ’25 meeting, versus ~123bps at 1600BST on Friday (after EUR STIRs followed US counterparts higher into Friday evening). Euribor futures are +1.5 to +5.5 ticks through the blues.
  • The ECB is in its pre-meeting quiet period, so any comments from ECB’s Nagel and Villeroy today should not touch on monetary policy matters.

 

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The ECB are widely expected to cut rates by 25bps on Thursday, reflecting increased concerns around the Eurozone growth outlook (following the weak September flash PMIs) and confidence in inflation returning to target in a timely manner (following the soft September flash inflation data).

  • ECB-dated OIS almost fully price 25bp cuts at the October and December meetings, with 48bps of easing priced through year-end.
  • There are 128bps of cuts priced through the June ’25 meeting, versus ~123bps at 1600BST on Friday (after EUR STIRs followed US counterparts higher into Friday evening). Euribor futures are +1.5 to +5.5 ticks through the blues.
  • The ECB is in its pre-meeting quiet period, so any comments from ECB’s Nagel and Villeroy today should not touch on monetary policy matters.

 

Keep reading...Show less