STIR: Euribor Futures Slightly Softer On Overnight US Budget Developments
Euribor futures are flat to -1.5 ticks through the blues, softening alongside Bunds after the US house passed an expansionary budget blueprint overnight.
- ECB-dated OIS price 82bps of easing through year-end, 1bp more hawkish than yesterday’s close.
- Yesterday evening, ECB’s Stournaras told Politico that rates are “definitely still in restrictive territory”, and will likely reach a terminal of 2% by autumn.
- While in line with his prior comments, Stournaras’ stance is slightly more cautious than the likes of Villeroy and Centeno, who favour a move towards 2% by Summer.
- Today’s regional calendar is relatively light, with focus on the February flash inflation round, which begins with Spain tomorrow. MNI’s inflation preview will be released later today.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.422 | -24.5 |
| Apr-25 | 2.257 | -40.9 |
| Jun-25 | 2.074 | -59.2 |
| Jul-25 | 2.008 | -65.8 |
| Sep-25 | 1.921 | -74.5 |
| Oct-25 | 1.895 | -77.2 |
| Dec-25 | 1.848 | -81.8 |
| Feb-26 | 1.842 | -82.4 |
| Source: MNI/Bloomberg. | ||
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USDCAD TECHS: Trend Needle Points North
- RES 4: 1.4655 2.0% 10-dma envelope
- RES 3: 1.4564 3.500 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4516 High Jan 21
- PRICE: 1.4391 @ 08:05 GMT Jan 27
- SUP 1: 1.4261 Low Jan 20
- SUP 2: 1.4248 50-day EMA
- SUP 3: 1.4120 Low Dec 11
- SUP 4: 1.4011 Low Dec 5
Recent price action in USDCAD highlights resistance at 1.4516, the Jan 21 low, and support at 1.4261, the Jan 20 low. Both levels also represent important short-term directional triggers. The trend condition remains bullish and a clear breach of 1.4516 would confirm a resumption of the bull cycle. For bears, a move through 1.4261 and 1.4248, the 50-day EMA, would instead highlight a possible reversal.
STIR: Dovish Repricing In EUR STIRs, ECB Decision Headlines This Week
This morning’s rally in global core FI (see earlier posts for colour) has spilled over into EUR STIRs, with year-end ECB implied rates 3bps below Friday’s close. That leaves ECB-dated OIS pricing 91bps of easing through December, with 75bps of cuts priced through the first half of this year.
- December ’25 implied rates are still more hawkish than before Friday’s stronger-than-expected January flash PMIs. We note that some analysts have raised questions around the seasonality of the PMIs post-Covid, which may have biased readings higher in Q1.
- Euribor futures are +1.5 to +4.5 ticks through the blues. ERZ5 is +3.0 ticks at 97.860 this morning, widening the gap with support at 97.7950 (Jan 13 low), which contained downside on Friday.
- Thursday’s ECB decision headlines this week’s regional data calendar, with a 25bp cut unanimously expected by analysts and essentially fully priced in OIS. Our ECB preview will be released tomorrow.
- We also get flash Q4 GDP, the ECB's Bank Lending Survey, December money/credit , January EC sentiment and January flash inflation data this week, while the Fed decision and communications from US President Trump will also be in focus.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jan-25 | 2.675 | -24.6 |
| Mar-25 | 2.455 | -46.6 |
| Apr-25 | 2.323 | -59.8 |
| Jun-25 | 2.174 | -74.7 |
| Jul-25 | 2.124 | -79.7 |
| Sep-25 | 2.058 | -86.3 |
| Oct-25 | 2.039 | -88.3 |
| Dec-25 | 2.009 | -91.3 |
| Source: MNI/Bloomberg. | ||
AUDUSD TECHS: Tests Resistance At The 50-Day EMA
- RES 4: 0.6441 38.2% retracement of the Sep 30 - Jan 13 downleg
- RES 3: 0.6429 High Dec 12
- RES 2: 0.6384 High Dec 13
- RES 1: 0.6326/6331 50-day EMA / High Jan 24
- PRICE: 0.6279 @ 07:59 GMT Jan 27
- SUP 1: 0.6252 20-day EMA
- SUP 3: 0.6165/31 Low Jan 17 / 13 and the bear trigger
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A medium-term bearish trend condition in AUDUSD remains intact and the latest recovery appears corrective. The pair traded higher last week and in the process pierced resistance at 0.6326, the 50-day EMA. A clear break of the EMA would strengthen a short-term bullish condition and open 0.6384, the Dec 13 high. The key support and bear trigger has been defined at 0.6131, the Jan 13 low.
