EM CEEMEA CREDIT: Nigeria (NGERIA): CB on Economic Outklook

DUF6 107.20/107.10/107.00/106.80p condor 1x1x1x0.5, bought for 1 an 1.25 in 6k.

ECB-dated OIS currently prices ~7bp of easing through September ’26, which represents the trough in the implied rate path.

• We have previously noted that Friday’s country-level November flash inflation data had little impact on ECB pricing, dampening the likelihood of a meaningful move around tomorrow’s Eurozone-wide HICP data.
• Ultimately, we believe that spot inflation may need to start undershooting the Bank’s target before markets become more sympathetic to the idea of another 25bp cut being added to the cycle.
• Still, several sell-side desks have outlined receiver-side plays as cheap hedges or good risk/reward plays in recent weeks.
• Goldman Sachs deem “current levels of low implied vol as attractive and see value in receivers focused around mid-2026 (June) ECB pricing to hedge core EUR rates shorts”, as “recent focus on disinflation - including from Chinese export competition - suggests risks to the 2026 ECB path”. This is even as they note that their “base case remains that the ECB will remain on hold and that EU cyclical conditions will drive core rates higher over time”.

RXF6 128.50p, bought for 35 and 35.5 in 3k.