The ECB was expected to be the main event...>

EURIBOR: The ECB was expected to be the main event of the week for the Euribor

strip, and the meeting did not disappoint with most of the strip moving 10-16

ticks lower on the week.

- The ECB announced a 10bp cut to the deposit rate but also introduced tiering

at 0%, with a 6x multiple of minimum reserves allowed to be held at the central

bank and not have to pay negative rates. This multiple was higher than expected

and helped the strip to move lower. Furthermore, the ECB announced E20bln in

asset purchases each month starting in November. However, with no announcement

on issuer limits, the ECB will not be able to carry out its purchases for long

without violating the capital key.

- These details were seized upon by the market and saw the Euribor strip extend

lower into the close. The strip moved lower once again through Friday. The moves

seen in the latter part of the week overshadowed any price movement seen ahead

of the ECB this week.

- Whites are 6.5-10 ticks lower on the week, Reds 11.5-13 ticks lower, Greens

13.5-15 ticks lower and Blues 15.5-16 ticks lower.