FINANCIALS: New Issue - BFCM
*IPT: BFCM BENCHMARK 10Y SR NON-PREF MS+160 AREA - bbg...
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STIR: Dovish Repricing In EUR STIRs, ECB Decision Headlines This Week
This morning’s rally in global core FI (see earlier posts for colour) has spilled over into EUR STIRs, with year-end ECB implied rates 3bps below Friday’s close. That leaves ECB-dated OIS pricing 91bps of easing through December, with 75bps of cuts priced through the first half of this year.
- December ’25 implied rates are still more hawkish than before Friday’s stronger-than-expected January flash PMIs. We note that some analysts have raised questions around the seasonality of the PMIs post-Covid, which may have biased readings higher in Q1.
- Euribor futures are +1.5 to +4.5 ticks through the blues. ERZ5 is +3.0 ticks at 97.860 this morning, widening the gap with support at 97.7950 (Jan 13 low), which contained downside on Friday.
- Thursday’s ECB decision headlines this week’s regional data calendar, with a 25bp cut unanimously expected by analysts and essentially fully priced in OIS. Our ECB preview will be released tomorrow.
- We also get flash Q4 GDP, the ECB's Bank Lending Survey, December money/credit , January EC sentiment and January flash inflation data this week, while the Fed decision and communications from US President Trump will also be in focus.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jan-25 | 2.675 | -24.6 |
| Mar-25 | 2.455 | -46.6 |
| Apr-25 | 2.323 | -59.8 |
| Jun-25 | 2.174 | -74.7 |
| Jul-25 | 2.124 | -79.7 |
| Sep-25 | 2.058 | -86.3 |
| Oct-25 | 2.039 | -88.3 |
| Dec-25 | 2.009 | -91.3 |
| Source: MNI/Bloomberg. | ||
AUDUSD TECHS: Tests Resistance At The 50-Day EMA
- RES 4: 0.6441 38.2% retracement of the Sep 30 - Jan 13 downleg
- RES 3: 0.6429 High Dec 12
- RES 2: 0.6384 High Dec 13
- RES 1: 0.6326/6331 50-day EMA / High Jan 24
- PRICE: 0.6279 @ 07:59 GMT Jan 27
- SUP 1: 0.6252 20-day EMA
- SUP 3: 0.6165/31 Low Jan 17 / 13 and the bear trigger
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A medium-term bearish trend condition in AUDUSD remains intact and the latest recovery appears corrective. The pair traded higher last week and in the process pierced resistance at 0.6326, the 50-day EMA. A clear break of the EMA would strengthen a short-term bullish condition and open 0.6384, the Dec 13 high. The key support and bear trigger has been defined at 0.6131, the Jan 13 low.
GILTS: Opening calls
Gilt calls, 92.26/92.36.
