RUSSIA: Annual Inflation Expected to Edge Higher to +10.00% Y/Y
* Ukraine agreed to a US proposal for a complete 30-day ceasefire with Russia in talks in Saudi Ar...
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STIR: Latest Tariff Threats Keep Pressure On EUR Implied Rates
ECB-dated OIS have held onto the dovish repricing seen into Friday’s close, with US President Trump’s weekend tariff threats on steel/aluminium imports keeping the pressure on EUR implied rates. 87bps of ECB easing are priced through year-end at typing.
- OIS continue to fully price a 25bp cut in March, with 19bps of sequential cuts priced through the April and June decisions. 25bp cuts at the next three gatherings would bring the deposit rate to 2.00%, in the middle of the ECB’s heavily caveated 1.75-2.25% neutral range.
- In a podcast with Bloomberg released Friday, ECB Chief Economist Lane described neutral as a “hypothetical conjecture”, as it assumes a shock-free economy. In Lane’s words: “What's the probability the world won't face any more shocks in the next year?”.
- Euribor futures are -0.5 to +1.5 ticks through the blues, with a light flattening bias seen.
- The February Sentix survey is due at 0930GMT, but isn’t usually a market mover. That leaves focus on ECB President Lagarde’s appearance at the EU Parliament at 1400GMT.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.418 | -24.8 |
| Apr-25 | 2.232 | -43.3 |
| Jun-25 | 2.043 | -62.2 |
| Jul-25 | 1.960 | -70.5 |
| Sep-25 | 1.872 | -79.3 |
| Oct-25 | 1.849 | -81.6 |
| Dec-25 | 1.804 | -86.1 |
| Feb-26 | 1.801 | -86.4 |
| Source: MNI/Bloomberg. | ||
BUNDS: /SWAPS: Long End ASWs Remain Under Pressure
The long end of the ASW spread curve continues to trade heavily, both in relative terms against Schatz and outright.
- Buxl ASW vs. 3-month Euribor registered a fresh cycle closing low on Friday, with increased free float and German issuance/fiscal risks continuing to weigh.
- These fundamental sources of pressure mean that relief episodes in long swap spreads remains contained, even when bonds manage to rally in outright trade.
- Meanwhile, repo/collateral dynamics have seemingly been binding in the front end of the ASW curve, preventing Schatz spread tightening towards ’24 lows.
- Still, J.P.Morgan go against the trend and recommend a tactical Bund swap spread paid position against the Schatz equivalent, given what they deem to be “attractive valuations.” They also suggest that their “2s/10s German cash bond curve flattening bias is also supportive of a steeper swap spread curve.”
SILVER TECHS: Bullish Trend Condition
- RES 4: $34.903 - High Oct 23 and the bull trigger
- RES 3: $33.450 - 76.4% of the Oct 23 - Dec 19 ‘24 bear leg
- RES 2: $33.000 - Round number resistance
- RES 1: $32.652 - High Feb 7
- PRICE: $32.160 @ 08:11 GMT Feb 10
- SUP 1: $30.814 - 50-day EMA
- SUP 2: $29.704 - Low Jan 27
- SUP 3: $28.748 - Low Dec 19 and bear trigger
- SUP 4: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
Silver traded higher last week. Key resistance at $32.338, the Dec 12 high, has been pierced. Clearance of this hurdle would highlight a stronger reversal and cancel a recent bearish theme. This would open the $33.00 handle and expose $33.450, a Fibonacci retracement. Initial firm support lies at $30.814, the 50-day EMA and a pivot level. A clear break of the EMA would reinstate the recent bearish theme.
