STIR: Euribor Futures Weaken Alongside Core FI
Euribor futures are flat to -1.5 ticks through the blues, weakening alongside core FI over the past ~45 minutes. Today’s regional calendar is light, with focus on tomorrow’s US CPI report and Thursday’s ECB decision.
- End-2025 OIS implied ECB rates are ~0.5bp less dovish than yesterday’s close, with 150bps of easing priced.
- Analysts overwhelmingly favour a 25bp cut at Thursday’s decision, but generally view the risks of a 50bp cut as greater than the ~5% discounted in OIS markets.
- Meanwhile, there are 32bps of sequential cuts priced through the January decision.
- German final inflation confirmed flash estimates at 2.4% Y/Y, while Italian October industrial production is due at 0900GMT/1000CET.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Dec-24 | 2.905 | -25.9 |
| Jan-25 | 2.587 | -57.7 |
| Mar-25 | 2.262 | -90.3 |
| Apr-25 | 2.028 | -113.6 |
| Jun-25 | 1.862 | -130.2 |
| Jul-25 | 1.781 | -138.3 |
| Sep-25 | 1.720 | -144.5 |
| Oct-25 | 1.690 | -147.5 |
| Dec-25 | 1.662 | -150.2 |
| Source: MNI/Bloomberg. | ||
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JGB TECHS: (Z4) Bounce Reverses
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 146.53 - High Aug 6
- PRICE: 143.70 @ 16:14 GMT Nov 08
- SUP 1: 143.39 - Low Nov 07
- SUP 2: 142.23 - Low Jul 02
- SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing
Prices fell further Thursday, extending the recent pullback. The return lower at the start of this week has culminated in a break of 143.57, marking both the Jul 17 high on the continuation contract as well as the Oct 22 low. For now, the 50-dma tops out at 144.32, and marks first resistance. A continuation higher would open 146.53, the Aug 6 high (cont) and a bull trigger.
US TSY FUTURES: BLOCK: Late 2Y/10Y Ultra-Bond Flattener
- Flattener crossed late Friday at 1645:30ET, DV01 $322,000
- -8,900 TUZ4 102-23.88, sell through 102-24.38 post time bid vs.
- +3,700 UXYZ4 113-16, post time offer
USDCAD TECHS: Trend Needle Points North
- RES 4: 1.4179 2.0% 10-dma envelope
- RES 3: 1.4000 Round number resistance
- RES 2: 1.3977 High Oct 13 and a key M/T resistance
- RES 1: 1.3959 High Nov 1 / 6
- PRICE: 1.3910 @ 16:29 GMT Nov 8
- SUP 1: 1.3836/22 20-day EMA and a key S/T support / Low Nov 6
- SUP 2: 1.3744 50-day EMA
- SUP 3: 1.3611 Low Oct 8
- SUP 4: 1.3567 Low Oct 7
USDCAD reversed course Wednesday and recovered from Tuesday's low. The trend outlook is unchanged, it remains bullish. Attention is the key resistance at 1.3946, the Aug 5 high. This hurdle has been pierced, a clear break would strengthen the uptrend and open 1.3977, the Oct 13 high and a key medium-term resistance point. Initial firm support to watch lies at 1.3836, the 20-day EMA.
