STIR: ECB Implied Rates Up To 2bps More Dovish On Renewed Risk Off
MNI’s ECB preview is here.
- What was originally seen as a close call after last month’s fifth consecutive cut is now seen as locked in, with 24bps priced in ECB-dated OIS, after the yet further escalation in global trade policies on the back of US tariffs.
- Last month saw “not just […] an innocuous little change” in the language describing its policy stance, with monetary policy “becoming meaningfully less restrictive” rather than a more static restrictive previously. Some look for a further change although we think that might be a step too far this month, with a hybrid approach including a nod to an increasingly neutral setting a viable alternative.
- OIS price 85bps of easing through year-end, 2bps more dovish than yesterday’s close with risk assets on the defensive. The US is attempting to restrict NVIDIA from selling its H20 chip to China, while President Trump also announced an investigation into the need for tariffs on critical minerals.
- Euribor futures are +1.0 to +4.5 ticks through the blues, with the greens/blues outperforming. ERZ5 is +1.5 ticks at 98.295, eyeing resistance at the April 7 and 9 highs of 98.335.
- Today’s regional data calendar includes final March HICP data and February balance of payments data.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Apr-25 | 2.175 | -24.1 |
| Jun-25 | 1.975 | -44.1 |
| Jul-25 | 1.850 | -56.6 |
| Sep-25 | 1.700 | -71.6 |
| Oct-25 | 1.642 | -77.4 |
| Dec-25 | 1.569 | -84.7 |
| Feb-26 | 1.544 | -87.2 |
| Mar-26 | 1.535 | -88.1 |
| Source: MNI/Bloomberg. | ||
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EURJPY TECHS: Bullish Structure
- RES 4: 164.55 High Jan 7
- RES 3: 164.08 High Jan 24 and a key resistance
- RES 2: 162.70 High Jan 28
- RES 1: 162.36 High Mar 12
- PRICE: 162.10 @ 07:09 GMT Mar 17
- SUP 1: 159.50 20-day EMA
- SUP 2: 158.74 Low May 5
- SUP 3: 155.60 Low Mar 4
- SUP 4: 154.80 Low Feb 28 and a bear trigger
A bull cycle in EURJPY remains in play and the cross is trading just ahead of last week’s cycle high. Price has recently breached a resistance at 161.19, the Feb 13 high. A clear break of the hurdle strengthens a bullish condition and opens 162.70 next, the Jan 28 high. On the downside, initial support to watch is 159.50 the 20-day EMA. Key support has been defined at 154.80, the Feb 28 low.
USDJPY TECHS: Shallow Correction
- RES 4: 154.80 High Dec 12 ‘24 and a key resistance
- RES 3: 151.45 50-day EMA
- RES 2: 150.18/151.30 High Mar 5 / 3 and a key near-term resistance
- RES 1: 149.46 20-day EMA
- PRICE: 148.97 @ 07:01 GMT Mar 17
- SUP 1: 146.54 Low Mar 11 and the bear trigger
- SUP 2: 145.43 2.0% 10-dma envelope
- SUP 3: 145.00 Round number support
- SUP 4: 144.13 76.4% retracement of the 16 ‘24 - Jan 10 bull leg
The trend direction in USDJPY remains down and the latest recovery appears corrective. A fresh cycle low on Mar 11 strengthens a bearish theme. The move down resulted in a print below 146.95, 61.8% of the Sep 16 ‘24 - Jan 10 bull leg. This opens 145.92 next, the Oct 4 2024 low. Moving average studies remain in a bear-mode set-up, highlighting a dominant downtrend. Key short-term resistance is unchanged at 151.30, Mar 3 high.
EUROSTOXX50 TECHS: (H5) Monitoring Support At The 50-Day EMA
- RES 4: 5611.50 2.500 proj of the Nov 21 - Dec 9 - 20 ‘24 price swing
- RES 3: 5606.00 3.000 proj of the Dec 20 ‘24 - Jan 8 - 13 price swing
- RES 2: 5600.00 Round number resistance
- RES 1: 5409.47/5575.00 20-day EMA / High Mar 3 and the bull trigger
- PRICE: 5397.00 @ 06:42 GMT Mar 17
- SUP 1: 5284.00 Low Mar 11
- SUP 2: 5249.00 Low Feb 5
- SUP 3: 5202.00 50.0% retracement of the Dec 20 ‘24 - Mar 3 bull leg
- SUP 4: 5185.00 Low Feb 4
The medium-term trend direction in the Eurostoxx 50 futures contract remains up and the recent pullback is considered corrective - for now. However, note that support at the 50-day EMA, at 5314.94, has been pierced. A clear break of this average would highlight a stronger short-term bear threat and suggest scope for a deeper retracement. This would open 5202.00, a Fibonacci retracement. A resumption of gains would open the 5600.00 handle.
