STIR: Services PMIs In Focus; 63bps of ECB Cuts Priced Through Year-End

Euribor futures are little changed through the blues, with the early European focus on May’s services PMI releases.

• Although the PMIs for Germany, France and the Eurozone will be final readings, there remains interest in the details of the output charge and employment components.
• Ahead of tomorrow's ECB meeting, dated OIS show 63bps of cuts through the remainder of this year, down from the year-to-date hawkish extreme of ~55bps seen last Friday.
• A 25bps cut is ~95% discounted for tomorrow’s meeting, with just 3bps of sequential cuts priced through July.
• MNI’s baseline scenario sees President Lagarde steering clear of providing any strong policy signals for the July or September meetings, but indicating a willingness to ease further, economic conditions permitting.
• Our full ECB preview is here.