FRANCE DATA: France Manufacturing Sentiment Lowest Since Dec 2020
Jul-25 06:51
France Manufacturing Sentiment disappointed printing at 95 in July (vs consensus and prior of 99), the lowest since December 2020.
- It deviated significantly from its long term average of 100 and remains below the pre-covid (2014-19) average of 103.7.
- Of particular note, 'Personal Production expectations' subcomponent fell over 3 points to -5.4 - the lowest since July 2023, and the 'Demand and export order books' subcomponent deteriorated to -18.5 (vs -8.6 prior) - the lowest since May 2021. Similarly, the subcomponent 'General Production Expectations decreased to -18 from -11.6 in June, and therefore remained at the lowest levels since November 2020.
- This suggests a continued weakness in the manufacturing sector of France's economy as reflected in the France Flash Manufacturing PMI reading for July which fell to 44.1 - the lowest since January 2024.
- The graph below shows that the France services sentiment indicator released by Insee also fell in July to the lowest since 2021, and moves below the pre-covid average of 100.5 (2014-2019).
- Responses for this survey were collected between June 27 and July 22.
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STIR: SONIA Markets Flat, A Little Under 50bp Of ’24 BoE Cuts Priced
Jun-25 06:50
Little movement in BoE-dated OIS, with just under 15bp of cuts priced through the August meeting and ~47bp of easing showing through December's MPC decision
- SONIA futures are little changed through the blues, operating on light volume.
- We highlighted some potential short-term limitations for further dovish repricing on Monday.
- The latest Sunak-Starmer debate took place last night but won’t be a market mover, given the lack of fresh information and Labour’s wide lead in the opinion polls.
- The UK data calendar is empty today.
- That will leave participants to eye broader news flow and wider market moves for cues.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Aug-24 | 5.053 | -14.7 |
| Sep-24 | 4.985 | -21.5 |
| Nov-24 | 4.836 | -36.4 |
| Dec-24 | 4.733 | -46.7 |
| Feb-25 | 4.593 | -60.7 |
| Mar-25 | 4.494 | -70.6 |
| May-25 | 4.370 | -83.0 |
| Jun-25 | 4.275 | -92.5 |
Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.
USD: A red start for the Dollar
Jun-25 06:33
- A red start for the Dollar, down against the Majors, nothing big, the Yen is leading in G10s, was up 0.11% pre EU Cash Govie open and is still up 0.11% post Cash open.
- Despite the pullback off the 160.00 handle on likely profit taking, the Yen remains at its worst level against most currencies.
- USDJPY still trades closer to Yesterday's mid range, and market participants will still be eyeing the 160.17 level, April high, and the highest printed level since 1990.
- While the Dollar is off its best level, the AUD still trades close to Yesterday's printed high of 106.376 in AUDJPY, some the highest levels since 2007.
- Upside target is still unchanged at the 2007 double top circa 107.873.
STIR: 44bp Of ’24 ECB Cuts Priced; Schnabel Downplays ECB-Fed Policy Divergence
Jun-25 06:32
Euribor futures are +0.5 to +2.0 through the blues, comfortably within recent ranges.
- ECB-dated OIS continues to show a ~70% implied probability of a 25bp rate cut through the September meeting, while 44bps of easing is priced through year-end.
- In a panel appearance yesterday afternoon, ECB Executive Board member Schnabel said she was “not so concerned” at the prospect of significant Euro-area/US policy divergence, citing similarities in inflation conditions.
- There are scheduled speeches from ECB’s Stournaras, Nagel and Panetta today, though the settings/topics of the appearances may limit the scope for market moving rhetoric.
- Meanwhile, today’s regional data calendar is fairly limited.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jul-24 | 3.651 | -1.2 |
| Sep-24 | 3.483 | -18.0 |
| Oct-24 | 3.412 | -25.1 |
| Dec-24 | 3.226 | -43.7 |
| Jan-25 | 3.135 | -52.8 |
| Mar-25 | 2.995 | -66.8 |
| Apr-25 | 2.916 | -74.7 |
| Jun-25 | 2.791 | -87.2 |
| Source: MNI/Bloomberg. 2025 dates are estimated. | ||
