STIR: Euribor Higher On Continued French Angst; 75% Probability of ECB September

Euribor futures flat to +8.0 through the blues, as French political uncertainty continues to dominate.

• There has also been a modest dovish repricing in ECB-dated OIS, which show 42bps of cuts through the remainder of 2024 (vs ~40bps at yesterday’s close).
• The implied probability of a September rate cut is now around ~70%, from around 50% at the start of the week.
• There was limited reaction to the BoJ decision overnight (deemed dovish via JGB and JPY FX channels).
• French final HICP was a touch softer than the flash reading on a rounded basis (2.6% Y/Y vs 2.7% prior) but was not a market mover.
• The remainder of today’s regional data calendar does not feature traditionally market moving releases, but scheduled appearances from ECB Executive Board members Lane (1000BST), Schnabel (1430BST) and Lagarde (1830BST) will attract interest, as usual.