Nov 26, 2024 - 7:29 AM
STIR: ECB Implied Cuts Up to 2bps Less Dovish, Focus On Thurs/Fri Inflation
STIR
ECB-dated OIS are up to 2bps less dovish versus yesterday’s close, with end-2025 implied cuts at 148bps (vs ~150bps yesterday). There are 33.5bps of easing priced through the December meeting, corresponding to a ~35% implied probability of a 50bp cut.
- A few ECB speakers have been a little more dovish since last Friday’s flash PMIs, but there doesn’t seem to be much appetite to signal the chance of a larger cut than 25bps.
- Yesterday, ECB’s Kazaks provided a more assured view that a cut will be delivered in December. Meanwhile, while Irish CB Governor Makhlouf said he was “open-minded” on the slope of the downward trajectory in policy rates, with recent data making him “increasingly confident” of reaching the 2% target in 2025.
- Several ECB speakers are due today (Villeroy, Centeno, Rehn, Muller and Kazaks), with the data calendar otherwise light. Focus remains on the November flash inflation round starting on Thursday.
Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
Dec-24 | 2.832 | -33.5 |
Jan-25 | 2.486 | -68.1 |
Mar-25 | 2.176 | -99.1 |
Apr-25 | 1.977 | -119.0 |
Jun-25 | 1.842 | -132.5 |
Jul-25 | 1.775 | -139.2 |
Sep-25 | 1.726 | -144.2 |
Oct-25 | 1.705 | -146.3 |
Dec-25 | 1.689 | -147.8 |
Source: MNI/Bloomberg. |
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