SILVER TECHS: Corrective Cycle

DUV5 107.20/107.10/106.90p ladder, sold at -9.25 (receive) in 7.6k.

• The Euribor curve has gradually steepened since the September decision, with Z6/Z7 up almost 5 ticks to 24 ticks over the past two weeks. With the ECB’s easing cycle likely at (or at least very close to) its end, focus for markets is moving further out the curve, with modest hike premiums being built in.
• The implementation and impact of increased German fiscal spending, alongside the lagged impact of past rate cuts, is expected to support the economic recovery. Key to this recovery will be an increase in household’s propensity to consume from low levels, and the emergence of fiscal multipliers from German defence/infrastructure spending. There is uncertainty with respect to both of these dynamics. 
• In the near-term, ECB-dated OIS price 10bps of easing through July 2026, with inflation risks still potentially tilted to the downside in the coming months.
• This morning, ECB’s Cipollone suggested Eurozone inflation risks are “very balanced”. In line with other dovish leaning Governing Council colleagues, he noted that there will be “lots of information” available before the December projection round.
• The German September IFO survey is due at 09003BST, with analysts expecting a modest improvement across components. Yesterday’s composite PMI was stronger-than-expected at 52.4 (vs 50.7 cons, 50.5 prior), driven by the services sector. 

ERH6 98.25/98.37 call spread paper paid 1 on 2K.