STIR: ECB-dated OIS Little Changed; Makhlouf Cautions EU Tariffs on China

Euribor futures are off overnight lows alongside Bunds, though remain little changed through the blues versus Friday’s settlement levels.

• Friday’s pre-settlement rally was quickly reversed, which left futures trading 1 to 2 ticks below settlement into the close.
• There is little net change in ECB-dated OIS since last Friday’s close, with 20bps of easing priced through the September meeting (which includes an updated set of macroeconomic projections) and 45bps through year-end.
• A weekend interview with Central Bank of Ireland Governor Makhlouf (generally centrist/hawkish leaning) largely centred on the Irish economic picture, though he still stressed the ECB’s data dependent/no-precommitment approach to policy.
• However, he seemingly cautioned the EU’s decision to start implementing tariffs on Chinese electric vehicles, noting that the consequences of tariffs can be “unexpected and surprising”.
• There is no scheduled ECB-speak today, though several Executive Board members will speak at the joint ECB/IMF conference later this week.