TURKEY: Deposit, Loan Rates Elevated as Banking Sector Prices in Tighter MonPol
* Ekonomi run a piece in which they note that the high September inflation reading and CBRT Govern...
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EQUITIES: European Equities are extending gains
- European Equity futures are extending gains, the Estoxx (VGU5) leads, up 0.60%, and is through the September high printed last Week.
- Next immediate resistance comes at 5438.00.
- In terms of sector, the Banks are the second best performer with the SX7E now up 0.62%.
- The initial resistance will be seen a little further out, up to 242.85, the 2009 high.
- SX7E did manage a 237.32 high back in late August.
(Chart source: MNI/Bloomberg finance LP).
STIR: EUR STIRs Favour A 2% Terminal Rate
ECB-dated OIS continue to just about lean in favour of a 2% terminal rate, with 11.5bps of easing priced through June 2026. Last week’s ECB decision saw the bar to another cut pushed a little higher, with the outlook now considered to be “more balanced” and the Governing Council not willing to react to “small deviations” from the updated inflation projections. The case for any further cuts will need to be motivated by incoming data.
- Focus in the days since the September decision has been on ECBspeak. The most vocal Governing Council member has been new Austrian National Bank Governor Kocher.
- Overall, his comments have been fairly pragmatic, supporting a steady path for rates for now, but keeping the door open to fine tuning if justified by the data.
- Elsewhere, the usually hawkish Nagel told Faz on Friday evening that further cuts could threaten price stability.
- Euribor futures are +0.5 to +1.0 ticks through the blues.
- Limited reaction in EUR STIRs to France’s (generally expected) downgrade from Fitch on Friday. More on that to follow.
- Today’s regional calendar includes the ECB’s latest Survey of Monetary Analysts and July trade balance data. ECB’s Schnabel and Lagarde are also set to speak.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Oct-25 | 1.918 | -0.7 |
| Dec-25 | 1.881 | -4.4 |
| Feb-26 | 1.865 | -6.0 |
| Mar-26 | 1.823 | -10.2 |
| Apr-26 | 1.818 | -10.7 |
| Jun-26 | 1.810 | -11.5 |
| Jul-26 | 1.811 | -11.4 |
| Sep-26 | 1.825 | -10.1 |
| Source: MNI/Bloomberg Finance L.P. | ||
USDCAD TECHS: Bullish Theme
- RES 4: 1.4111 High Apr 10
- RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.3925 High Aug 22 and the bull trigger
- RES 1: 1.3890 High Sep 11
- PRICE: 1.3839 @ 08:03 BST Sep 15
- SUP 1: 1.3790/27 50-day EMA / Low Aug 27 and a bear trigger
- SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 4: 1.3637 Low Jul 25
Despite last Thursday’s pullback, a bull cycle in USDCAD remains intact. The recovery from the Aug 29 low highlights a reversal signal and if correct, marks the end of the corrective pullback between Aug 22 - 29. A continuation higher would open the bull trigger at 1.3925, the Aug 22 high. Support lies at 1.3727, the Aug 29 low. Clearance of this level would instead reinstate a short-term bear theme and expose 1.3709 initially, a Fibonacci retracement.
