ECB: MNI ECB Review: Lagarde Sees The End Of The Easing Cycle
Jun-05 17:14
- We have published and e-mailed to subscribers the MNI ECB Review, including MNI analysis.
- Please find the full report here: https://media.marketnews.com/ECB_Review_Jun2025_65190787cc.pdf
- The ECB cut its three key rates by 25bps, including the deposit rate to 2.00% as fully expected.
- The decision statement was unsurprisingly non-committal.
- New forecasts showed a sharper than expected drop in HICP inflation for 2026, but it was mostly on energy whilst core inflation and GDP growth for 2026 was marked down a tenth for exactly in line with the median analyst reviewed by MNI.
- President Lagarde gave a clearly more hawkish/congratulatory tone in the press conference however, noting policy is well positioned and that “we are getting to the end of a monetary policy cycle that was responding to compounded shocks.”
- Released after the press release, a new approach at providing scenario analysis didn’t move markets.
- A Bloomberg sources piece that officials envisaged a pause in July echoed market pricing.
- The main change today has been a notable hawkish shift in ECB pricing, unwinding some recent dovish moves on data, with September pricing drifting to 14-15bp vs an equivalent 20bp yesterday.
- There is only just about one cut priced for the rest of this year, in December.
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US TSYS/SUPPLY: Review: Strong 10Y Auction
May-06 17:05
- Treasury futures moving higher (TYM5 +6 at 111-08, 4.3257% yld) after the $42B 10Y note auction (91282CNC1) stops 1.3bp through: drawing 4.342% high yield vs. 4.355% WI; 2.60x bid-to-cover vs. 2.67x prior.
- Peripheral stats: indirect take-up retreats to 71.19% vs. 87.90% prior; direct bidder take-up rises from last month's record low of 1.4% to 19.88%; primary dealer take-up 8.93% vs. 10.7% prior.
- The next 10Y auction (re-open) is tentatively scheduled for June 11.
FED: US TSY 10Y NOTE AUCTION: HIGH YLD 4.342%; ALLOTMENT 92.86%
May-06 17:02
- US TSY 10Y NOTE AUCTION: HIGH YLD 4.342%; ALLOTMENT 92.86%
- US TSY 10Y NOTE AUCTION: DEALERS TAKE 8.93% OF COMPETITIVES
- US TSY 10Y NOTE AUCTION: DIRECTS TAKE 19.88% OF COMPETITIVES
- US TSY 10Y NOTE AUCTION: INDIRECTS TAKE 71.19% OF COMPETITIVES
- US TSY 10Y AUCTION: BID/CVR 2.60
EURUSD TECHS: Monitoring Support At The 20-Day EMA
May-06 17:00
- RES 4: 1.1696 1.618 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 3: 1.1625 1.500 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 2: 1.1608 High Nov 9 2021
- RES 1: 1.1440/1573 High Apr 23 / 21 and the bull trigger
- PRICE: 1.1339 @ 16:43 BST May 6
- SUP 1: 1.1269 20-day EMA and a key support
- SUP 2: 1.1144 High APr 3
- SUP 3: 1.1047 50-day EMA and a pivot level
- SUP 4: 1.0805 Low Apr 3
Recent weakness in EURUSD appears corrective. The trend structure remains bullish - moving average studies are in a bull-mode position signalling a dominant uptrend. The latest move down has also allowed an overbought condition to unwind. A resumption of gains would open 1.1608, the Nov 9 2021 high. Initial key support to watch is the 20-day EMA, at 1.1269. A break of this average would signal scope for a deeper pullback.
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