ECB: Bank Lending Survey An Important Barometer Of Restrictiveness - de Guindos
ECB Vice President de Guindos' interview with Hospodárske Noviny did not bring any market moving insights. He re-iterated the ECB's core guidance that "if inflation moves according to our projections, the path of our monetary policy is clear", but that policy will still be decided "meeting by meeting, based on the incoming economic data".
- Ahead of Friday's ECB staff paper on neutral rates, de Guindos played down the usefulness of the concept: "The neutral rate is an interesting concept from an academic standpoint. However, using it as a reference for monetary policy decisions is not the right approach".
- However, he did state that "our bank lending surveys provide a much better indicator of the restrictiveness of our monetary policy, by showing how banks are easing or tightening financing conditions." This is notable, because the latest Bank Lending Survey reported a tightening in lending standards, suggesting ECB policy was indeed still in restrictive territory (and that more cuts are on the way).
Other headlines from the speech:
- "The high level of uncertainty we are now dealing with potentially calls for a more pragmatic approach, placing less weight on unobservable variables or model-based estimates with shortcomings and results expressed in wide ranges".
- "Estimating the impact on inflation is more difficult owing to the dampening effect of tariffs on demand and growth, as well as the fact that selective tariffs can lead to trade being redirected and diverted".
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
STIR: A Little Over 100bp Of ECB Cuts Priced For '25
Weakness in the long end has triggered hawkish repricing in EUR STIRs during early ’25, leaving ~103bp of easing priced through Dec vs. ~105bp late Friday and 115-120bp seen ahead of the Christmas break.
- Euribor futures 2.0 to 4.0 lower.
- ERZ5 ~10 ticks off its early November low.
- Services PMI data (final for Germany, France & the Eurozone) is due today, as is the flash German CPI data.
- Preliminary Eurozone CPI data is due tomorrow. The BBG survey median looks for +2.4% Y/Y for the headline CPI release vs. +2.2% in Nov.
- Our full preview of that release can be found here.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Jan-25 | 2.654 | -26.5 |
Mar-25 | 2.375 | -54.4 |
Apr-25 | 2.178 | -74.1 |
Jun-25 | 2.046 | -87.3 |
Jul-25 | 1.999 | -92.0 |
Sep-25 | 1.936 | -98.3 |
Oct-25 | 1.905 | -101.4 |
Dec-25 | 1.888 | -103.1 |
SILVER TECHS: Still Looking For Weakness
- RES 4: $34.903 - High Oct 23 and the bull trigger
- RES 3: $33.125 - High Nov 1
- RES 2: $32.338 - High Dec 12 and a key resistance
- RES 1: $30.529 - 50-day EMA
- PRICE: $29.644 @ 08:11 GMT Jan 6
- SUP 1: $28.748 - Low Dec 19
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play - for now. The metal has recently breached support at $29.642, the Nov 28 low. The break lower opens $28.446, a Fibonacci retracement. Note that moving average studies are in a bear-mode position highlighting a dominant downtrend. Key resistance has been defined at $32.338, the Dec 12 high. A break of this level would signal a reversal.
USDCAD TECHS: Bull Flag
- RES 4: 1.4678 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4389 @ 08:08 GMT Jan 6
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4320/4232 20-day EMA / Low Dec 17
- SUP 3: 1.4136 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD bulls remain in the driver’s seat. The latest pause in the uptrend appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4320, the 20-day EMA. A pullback would be considered corrective.
