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STIR: EZ-wide Flash Inflation Unlikely To Temper October ECB Cut Expectations

STIR
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Today’s Eurozone-wide flash September HICP print is unlikely to temper expectations for an October ECB cut, with almost 90% of the national-level data now in hand. ECB-dated OIS price 21.5bps of cuts through October, and several more sell-side analysts called for an October cut in updates last night.

  • Although Dutch flash HICP was a tenth higher than consensus at 3.3% Y/Y, EZ-wide headline inflation continues to track below the 1.8% Y/Y Bloomberg consensus.
  • Focus will nonetheless lie on the development of core and services inflation, as well as the ECB’s seasonally adjusted data.
  • OIS price 150bps of easing through the next six ECB meetings through June 2025.
  • Euribor futures are little changed through the blues.
  • ECB-speak from de Guindos, Nagel and Rehn is due today (Schnabel also chairs a panel on “Expectations Surveys, Central Banks and the Economy”).
  • Their comments will be eyed in the context of President Lagarde’s speech yesterday. She said the ECB will take into account stronger confidence in the inflation outlook at the October meeting.
  • Manufacturing PMIs are also due (finals for France, Germany and EZ).

 

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Today’s Eurozone-wide flash September HICP print is unlikely to temper expectations for an October ECB cut, with almost 90% of the national-level data now in hand. ECB-dated OIS price 21.5bps of cuts through October, and several more sell-side analysts called for an October cut in updates last night.

  • Although Dutch flash HICP was a tenth higher than consensus at 3.3% Y/Y, EZ-wide headline inflation continues to track below the 1.8% Y/Y Bloomberg consensus.
  • Focus will nonetheless lie on the development of core and services inflation, as well as the ECB’s seasonally adjusted data.
  • OIS price 150bps of easing through the next six ECB meetings through June 2025.
  • Euribor futures are little changed through the blues.
  • ECB-speak from de Guindos, Nagel and Rehn is due today (Schnabel also chairs a panel on “Expectations Surveys, Central Banks and the Economy”).
  • Their comments will be eyed in the context of President Lagarde’s speech yesterday. She said the ECB will take into account stronger confidence in the inflation outlook at the October meeting.
  • Manufacturing PMIs are also due (finals for France, Germany and EZ).

 

Keep reading...Show less