STIR: Euribor Implied Terminal At Highest Since April 2
The Euribor implied terminal rate is currently 1.88%, a touch below yesterday’s 1.89% level but still at its highest since April 2 (i.e. just before the initial US Liberation Day tariff announcement). With the ECB’s easing cycle now near (or potentially at) its close, material swings in terminal rate expectations will be driven by the data – particularly on the impact Q1/Q2 tariff related uncertainty has had on domestic demand and inflation.
- Euribor futures are +0.5 to +2.0 ticks through the blues.
- ECB-dated OIS are also little changed, with 17bps of easing priced over the next 12 months.
- Today’s regional data has not been market moving. Both German and Spanish final July HICP confirmed flash estimates on an annual basis.
- Regional focus remains on next week’s August flash PMIs.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Sep-25 | 1.912 | -1.0 |
| Oct-25 | 1.880 | -4.2 |
| Dec-25 | 1.813 | -10.9 |
| Feb-26 | 1.792 | -13.0 |
| Mar-26 | 1.754 | -16.8 |
| Apr-26 | 1.754 | -16.8 |
| Jun-26 | 1.751 | -17.1 |
| Jul-26 | 1.753 | -16.9 |
| Source: MNI/Bloomberg Finance L.P. | ||
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EURJPY TECHS: Trend Needle Points North
- RES 4: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 173.43 High Jul 12 ‘24
- RES 2: 172.92 High Jul 16 ‘24
- RES 1: 172.42 High Jul 11
- PRICE: 171.81 @ 08:02 BST Jul 14
- SUP 1: 170.81 Low Jul 11
- SUP 2: 169.48 20-day EMA
- SUP 3: 168.46 Low Jul 1
- SUP 4: 166.88 50-day EMA
The trend condition in EURJPY is unchanged, a bull cycle is in play and the cross continues to trade closer to its recent highs. Fresh gains last week confirm a resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Note that MA studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 172.92, the Jul 16 ‘24 high. Support to watch lies at 169.48, the 20-day EMA.
EQUITIES: Lower European Opens Seen After Trump’s Ups Tariff Threat Against EU
European equity index futures point to negative cash opens after U.S. President Trump upped his tariff threats against both the EU & Mexico over the weekend.
- Euro Stoxx 50 futures: -0.83%
- DAX futures: -0.96%
- CAC 40 futures: -0.80%
- FTSE MIB futures: -1.04%
- SMI futures: -0.39%
- FTSE 100 futures: -0.14%
- This morning’s move lower in Euro Stoxx 50 futures is still deemed corrective at this stage, with bulls remaining in technical control. Support at the 50-day EMA (5,328.83).
STIR: Dovish ECB Repricing After Trump's 30% Tariff Threat, July Cut Unlikely
Dovish repricing in EUR STIRs following US President Trump’s tariff letter to the EU is contributing to this morning’s twist steepening in core EGB curves. ECB-dated OIS are up to 2.5bps more dovish through the next 12 months. Pricing is still consistent with one more 25bp ECB cut this cycle, but a continuation would see markets once again entertain the idea of a terminal rate as low as 1.50%.
- US President Trump announced a 30% reciprocal tariff on EU exports from August 1. To assist with negotiations, the EU has said its E21bln package of retaliatory measures will also be delayed to this date. Meanwhile, Bloomberg sources suggest the EU is preparing to engage more with other nations (e.g. Canada, Japan) to coordinate responses to the US.
- OIS still assign virtually no implied probability of a cut in July. This is likely a combination of (i) previous ECB guidance that policy is in a “good place”, suggesting there is time to wait until the September decision where updated forecasts are presented, and (ii) the risk that Trump’s announcement is just a negotiating tactic and the actual outcome of negotiations will be less onerous than the 30% announced rate.
- Euribor futures are +0.5 to +3.0 ticks through the blues, with the whites/reds outperforming. ERH6 is +3.0 ticks at 98.20, but remains below last Friday’s 98.215 high.
- Today’s regional data calendar is light. ECB speakers include Cipollone and Vujcic.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jul-25 | 1.920 | -0.3 |
| Sep-25 | 1.823 | -10.0 |
| Oct-25 | 1.786 | -13.7 |
| Dec-25 | 1.700 | -22.3 |
| Feb-26 | 1.687 | -23.6 |
| Mar-26 | 1.665 | -25.8 |
| Apr-26 | 1.674 | -24.9 |
| Jun-26 | 1.681 | -24.2 |
| Source: MNI/Bloomberg Finance L.P. | ||
