UTILITIES: Terna (TRNIM Baa2/BBB+/NR): FY24 Results
Credit neutral overall. Firm results, marginally higher financing needs with the capex increase. * ...
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STIR: Euribor Futures Off Lows Alongside Bunds As German Election Digested
Euribor futures have moved away from session lows alongside Bunds, now flat to -1.5 ticks through the blues versus Friday’s settlement levels. Although the German election result increases the likelihood for future fiscal easing in Europe’s largest economy, the three ‘core parties’ (CDU/CSU, SPD, and Greens) have not reached the 2/3 threshold to push through debt brake reform without approval from the Left. This has likely limited the selloff in Bund and Euribor futures this morning.
- Friday’s post-settlement risk off rally in rates partly due to reports of a new bat-borne coronavirus strain in China.
- ECB-dated OIS price 78bps of easing through year-end, with 58bps of cuts priced through June.
- Over the weekend, Belgian National Bank Governor Wunsch – generally considered a hawkish leaning ECB Governing Council member – warned of the risk of “sleepwalking” into too many rate cuts. However, he said he was “relatively relaxed about the inflation outlook”.
- Meanwhile, Bank of Spain Governor Escriva favoured a cautious approach given “extraordinary uncertainty”, while Villeroy reiterated calls for the deposit rate to reach 2% by Summer.
- Today’s regional data calendar is headlined by the German IFO survey and the final Eurozone January inflation report.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.422 | -24.4 |
| Apr-25 | 2.265 | -40.1 |
| Jun-25 | 2.090 | -57.6 |
| Jul-25 | 2.034 | -63.2 |
| Sep-25 | 1.951 | -71.5 |
| Oct-25 | 1.925 | -74.1 |
| Dec-25 | 1.884 | -78.2 |
| Feb-26 | 1.880 | -78.6 |
| Source: MNI/Bloomberg. | ||
GILTS: Opening calls
Gilt calls, 92.47/92.53 range.
GILT TECHS: (H5) Trading Below Resistance
- RES 4: 94.75 76.4% retracement of the Dec 3 - Jan 13 bear leg
- RES 3: 94.35 High Feb 6 and key short-term resistance
- RES 2: 93.50 High Feb 13
- RES 1: 92.83 50-day EMA
- PRICE: 92.41 @ Close Feb 21
- SUP 1: 91.78 Low Feb 20
- SUP 2: 91.52 Low Jan 24 and a key near-term support
- SUP 3: 91.10 Low Jan 20
- SUP 4: 89.68/88.96 Low Jan 15 / 13 and the bear trigger
A bull cycle in Gilt futures has moderated, but remains the underlying theme, meaning recent weakness still appears corrective for now. Initial resistance to watch is 93.50, the Feb 13 high. A break of this level would highlight an early bullish reversal signal and refocus attention on the key short-term resistance at $94.35, the Feb 6 high. On the downside a continuation lower would instead expose the next important support at 91.52, the Jan 24 low.
