STIR: ECB Pricing Continues To Lean Toward 3x25bp Cuts This Year

ECB-dated OIS price 65bps of easing through the remainder of this year, holding onto the majority of the hawkish repricing seen following last week’s US jobless claims/retail sales data.

• Current pricing continues to lean more toward 3x further 25bp cuts this year than 2x, despite the once-per-quarter cut preferences expressed by several Governing Council members in recent weeks.
• ECB-speak has been light over the summer, leaving implied pricing largely dictated by broader risk-sentiment/US data.
• Euribor futures are +1.5 to 2.5 through the blues, alongside a rally in wider core FI markets.
• ECB’s Rehn is scheduled to speak from New York late Monday. He previously noted that the late July/early-August market turmoil was largely an overreaction, less so a reflection of economic fundamentals.
• Today’s regional calendar is otherwise light, with August flash PMIs due on Thursday.