REFINING: Bayernoil Neustadt Refinery Partly Shuts On Fire

Global impulses continue to bias ECB pricing higher at the start of the new week, with weekend musings from Bank of Italy Governor Visco and a mark lower in the final Eurozone services PMI (to a still more than healthy 55.1) doing little to influence the space, as cheapening in core global FI markets and higher oil prices are noted.

• That leaves a 25bp hike virtually fully priced for the June meeting, while terminal rate pricing of just below 3.80% (in deposit rate terms) is seen come October. While we have recovered from the post-CPI data troughs seen last week, we are not back to the levels observed at the close of business for the week prior.
• In terms of specifics, Visco conceded that current monetary policy settings are correct, although indicated that he would have preferred a more gradual approach. This underscored his position at the dovish end of the ECB spectrum, although he did caution that underlying inflation may take some time to moderate.
• Elsewhere, Croatian central bank chief Vujcic noted that wage pressures are “still very lively” while highlighting that risks to inflation remain to the upside.
• Comments from President Lagarde and Bundesbank chief Nagel round off today’s scheduled ECB communique.

ECB Meeting	€STR ECB-Dated OIS (%)	Difference Vs. Current Effective €STR Rate (bp)
Jun-23	3.393	+24.5
Jul-23	3.589	+44.1
Sep-23	3.685	+53.7
Oct-23	3.692	+54.4
Dec-23	3.684	+53.6
Jan-24	3.618	+47.0

Source: MNI - Market News/Bloomberg