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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.

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