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STIR: OIS Price 17bps More Cuts This Cycle; Q2 GDP 2nd Est Due This Week
ECB-dated OIS price 17bps more easing this cycle, down from 23bps at last Monday’s close. There is currently just a 6% implied probability of a cut in September. Data such as the August flash PMIs (August 21st) and the August flash inflation round (month-end) will be key to monitor ahead of the September decision, for which guidance will also be influenced by an updated set of staff macroeconomic projections
- Bloomberg latest survey of analysts was consistent with market pricing, indicating that ECB officials “will wait until December to deliver their next interest-rate cut in what is likely to be the final move in the cycle”.
- Euribor futures are flat to +1.5 ticks through the blues, with the strip lightly bull flattening alongside core FI markets.
- This week’s regional data calendar is relatively light. Eurozone Q2 GDP (Thursday) is expected to be in line with the flash release at 0.1% Q/Q, which would be a tenth below the ECB's June projections. However, some analysts have flagged downside risks stemming from the weak German industrial production report for June (which included downward revisions to the May reading).
- The second GDP release also provides a first look at employment and real productivity per employee. The ECB projects 0.0% Q/Q employment growth in Q2, while real productivity per employee is seen rising 0.5% Y/Y.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Sep-25 | 1.907 | -1.5 |
| Oct-25 | 1.869 | -5.3 |
| Dec-25 | 1.799 | -12.3 |
| Feb-26 | 1.782 | -14.0 |
| Mar-26 | 1.747 | -17.5 |
| Apr-26 | 1.747 | -17.5 |
| Jun-26 | 1.747 | -17.5 |
| Jul-26 | 1.748 | -17.4 |
| Source: MNI/Bloomberg Finance L.P. | ||
WTI TECHS: (U5) Pierces Bear Trigger
- RES 4: $81.12 - 3.000 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $80.00 - Psychological round number
- RES 2: $77.75 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 1: $70.96/75.98 - 61.8% of the Jun 23-24 downleg / High Jun 23
- PRICE: $63.15 @ 08:13 BST Aug 11
- SUP 1: $62.77 - Low Aug 11
- SUP 2: $58.17 - Low May 30
- SUP 3: $54.66 - Low May 5
- SUP 4: $54.01 - Low Apr 9 and a key support
WTI futures traded poorly Friday, cracking the 50-day EMA and piercing the bear trigger. This keeps S/T momentum pointed lower. The clear break exposes $58.17, the May 30 low. Gains early last week marked an extension of a corrective cycle - which may now have concluded. $69.41 marks the 50.0% retracement of the Jun 23-24 downleg - an important level at the close. A continuation higher would open $70.96 next, the 61.8% retracement point.
BRENT TECHS: (V5) Fresh Lows
- RES 4: $83.02 - 3.000 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $81.07 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $79.86 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 1: $72.89/77.73 - 61.8% of the Jun 23-30 downleg / High Jun 23
- PRICE: $65.99 @ 08:12 BST Aug 11
- SUP 1: $65.53/65.06 - Low Aug 8 / Jun 30
- SUP 2: $60.96 - Low May 30
- SUP 3: $58.18 - Low May 5
- SUP 4: $57.74 - Low Apr 9 and a key support
Weakness across Brent futures persists, with fresh pullback lows printed Friday. This extends the spell of weakness posted off the break of $71.40, the 50.0% retracement of the Jun 23 - 50 downleg. A further reversal would refocus attention on key support and the bear trigger at $65.06, the Jun 30 low. A break of this level would resume the recent bearish theme. The next resistance to watch remains $72.89, the 61.8% retracement point.
