STIR: Euribor Implied Terminal Rate Unchanged Since June ECB
Front-end Euribor futures have traded in relatively contained ranges since the ECB's more cautious-t...
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USDCAD TECHS: Fresh Cycle Low
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4111 High Apr 4
- RES 2: 1.3843/1.4016 50-day EMA / High May 12 and 13
- RES 1: 1.3713 20-day EMA
- PRICE: 1.3652 @ 08:05 BST Jun 18
- SUP 1: 1.3540/3517 Low Jun 16 / 1.0% 10-dma envelope
- SUP 2: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 3: 1.3473 Low Oct 2 2024
- SUP 4: 1.3410 1.764 proj of the Feb 3 - 14 - Mar 4 price swing
The trend needle in USDCAD points south and fresh cycle lows last week and again on Monday, reinforce a bearish theme. Short-term gains are considered corrective. Support at 1.3686, the May 26 low and a bear trigger, has been cleared, confirming a resumption of the downtrend. This maintains the price sequence of lower lows and lower highs. Sights are on 1.3517 next, envelope-based support. Resistance at the 20-day EMA is at 1.3713.
STIR: Euribor Implied Yield Changes Since Last Thursday Remains Fairly Contained
Although the ongoing conflict between Israel and Iran presents a new upside risk to the inflation outlook, changes in Euribor implied yields have been relatively contained since last Thursday’s settlement. Implied yields across the strip have increased 3-6bps across the past four sessions - not enough to materially change the outlook for ECB policy.
- The Euribor implied terminal rate is still indicated by the H6 contract, and is currently 1.82%.
- The curve remains notably more dovish than compared to the April 2 (i.e. pre-Liberation Day) settlement.
- ECB-dated OIS are little changed compared to yesterday’s close, with one more 25bp cut fully priced through the next 12 months.
- Several ECB speakers are due this morning. While they may reference the latest tensions as a risk to the outlook, and a justification of the ECB’s more cautious stance since June, meaningful new policy signals are not expected.
- Final Eurozone May HICP is due at 1000BST. Focus will be on the details, particularly to what extent the services deceleration (3.2% flash vs 4.0% prior) was driven by travel/Easter-sensitive categories.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jul-25 | 1.912 | -1.2 |
| Sep-25 | 1.807 | -11.7 |
| Oct-25 | 1.773 | -15.1 |
| Dec-25 | 1.706 | -21.8 |
| Feb-26 | 1.696 | -22.9 |
| Mar-26 | 1.679 | -24.5 |
| Apr-26 | 1.680 | -24.5 |
| Jun-26 | 1.682 | -24.3 |
| Source: MNI/Bloomberg Finance L.P. | ||
GILT TECHS: (U5) Support Remains Intact
- RES 4: 94.15 2.000 proj of the May 22 - 27 - 29 price swing
- RES 3: 94.00 Round number resistance
- RES 2: 93.73 1.764 proj of the May 22 - 27 - 29 price swing
- RES 1: 93.13./93.68 61.8% of Jun 13 - 16 downleg / High Jun 13
- PRICE: 92.69 @ Close Jun 17
- SUP 1: 92.23 Low Jun 16
- SUP 2: 92.17 20-day EMA
- SUP 3: 91.56 Low Jun 9
- SUP 4: 91.44 Low Jun 8
A bullish condition is Gilt futures remains intact and last Friday’s steep sell-off from the session high is - for now - considered corrective. The move higher last week marks an extension of the recent breach of resistance at 91.87, the May 20 high. This signals scope for a test of 93.73, a Fibonacci projection point. Note the uptrend is in overbought territory, a deeper pullback would unwind this position. Initial firm support lies at 92.17, the 20-day EMA.
