STIR: Euribor Futures Pare Losses Alongside Bunds As French Uncertainty Persists

Euribor futures have pared losses alongside Bunds as European desks digest last night’s French election results, last trading little changed through the blues.

• ECB-dated OIS contracts have held onto Friday’s dovish moves, with 41bps of cuts priced through year end and 19bps of easing priced through the September meeting.
• The French leftist NFP coalition surprisingly won the most votes in the second-round French legislative election, though fell well short of an overall majority.
• This has provided a fresh wave of uncertainty around French politics.
• Over the weekend, ECB’s Muller noted that the ECB should not rush to cut rates further, in line with his comments to the MNI Policy Team last week.
• Today’s global macro calendar is fairly light, which should leave focus on the French election fallout.