ECB VIEW: Nordea Add 25bp June Cut To Baseline Forecast; New Terminal 2.0%

Estox 50: +0.71%, Dax: +0.61%, CAC: +0.29%, FTSE +0.24%, SMI -0.22%.

• RES 4: 0.6429 High Dec 12 ‘24
• RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg              
• RES 2: 0.6409 High Feb 21 and a bull trigger 
• RES 1: 0.6364 High Mar 6 
• PRICE: 0.6287 @ 07:54 GMT Mar 11
• SUP 1: 0.6259/6187 Intraday low / Low Feb 4
• SUP 2: 0.6171/6088 Low Feb 4 / 3 and a key support 
• SUP 3: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
• SUP 4: 0.6000 Round number support

Recent gains in AUDUSD resulted in a move through both the 20- and 50-day EMAs. A resumption of gains and a stronger recovery would undermine a recent bearish theme and expose key short-term resistance at 0.6409, the Feb 21 high. Clearance of this hurdle would strengthen a bull cycle. On the downside, a move below 0.6187, the Mar 4 low, is required to reinstate a bear threat and open the bear trigger at 0.6088, the Feb 3 low.

Euribor futures have been dragged lower by Bunds after the German Green party signalled hopes for a defence spending deal by the end of this week. Yesterday’s rally in core FI/EUR STIRs was party a function of Green party pushback against incoming Chancellor Merz’s spending proposals.

• Euribor futures are +1.0 to -3.5 ticks through the blues, with the strip steepening. As noted earlier, there was modest interest in White/Red steepeners overnight.
• ECB-dated OIS continue to price the April decision as a 50/50 between a 25bp cut and a hold. There are 45bps of easing priced through year-end (i.e. just under 2x25bp cuts).
• Bank of Finland Governor Rehn is scheduled to speak at 0900GMT. We regard Rehn as a good barometer for the median Governing Council view, so his comments around the scope for further rate cuts in light of heightened uncertainty and “meaningfully less restrictive” policy will be important.
• Prior to the March decision, he described the direction of travel for rates as “clear”, with policy ceasing to be restrictive “during the spring and summer”.
• Today’s regional data calendar is light.