RENEWABLES: German Wind Output Forecast Comparison

• There remains a solid consensus that the ECB will hold the deposit rate at 2.00% at the December decision and through next year.
• A handful of analysts still expect further easing this cycle, with ANZ and Morgan Stanley forecasting in a terminal rate of 1.50%.
• The only analyst with a 2026 hike in their baseline scenario is TD Securities (Q4 '26). Others have pencilled in hikes in 2027.
• Analysts expect the meeting-by-meeting and data-dependent approach to be retained, alongside President Lagarde’s characterisation of policy being in a “good place”. This implies no explicit endorsement of market pricing for the next rate move to be a hike.

CBK (18/06/27 vs 16/06/28) 20p, trades 1.1 for the 2028 in 51k.

2-Year swap spreads are ~2.5bp wider vs. levels seen ahead of last week’s FOMC decision, hitting the widest level seen since April in the process.

• Much of the post-Fed widening has stemmed from the central bank announcing that it will buy $40bln of monthly in bills as part of its reserve management purchase operations (which got underway on Friday).
• The announcement compared to expectations that RMPs would begin in 2026.
• The Fed also noted its plans to keep RMPs "elevated" for a few months to respond to anticipated seasonal funding pressures at year-end and during the April tax season.
• J.P.Morgan have recommended initiating 2s/10s swap spread curve flatteners. They believe that the “announcement for front-loaded reserve management purchases by the Fed is supportive for swap spreads”. At the same time, their H126 projections for swap spreads suggests that “the 10-Year sector is likely to underperform the rest of the curve, and seasonal factors point to a flattening of the 2s/10s swap spread curve”.