EU CREDIT SUPPLY: Nykredit (NYKRE): IPT

• MNI: ITALY NOV FINAL HICP 1.1% Y/Y (1.1% FLASH, 1.3% OCT)
• ITALY NOV FINAL HICP -0.2% M/M (-0.2% FLASH, -0.2% OCT)

• MNI: EUROZONE DEC FLASH MANUF PMI 49.2 (49.9 FCAST, 49.6 NOV)
• EUROZONE DEC FLASH SERV PMI 52.6 (53.3 FCAST, 53.6 NOV)

The weaker-than-expected German and French flash December PMIs remove about a basis point of implied ECB rate hikes through the end of next year. ECB-dated OIS now price ~4.5bps of easing through December 2026.

• There’s not enough in the reports to meaningfully change the recent narrative around improving growth momentum. However, sluggish new orders and subdued services confidence highlight that there are still risks to growth in both directions – we expect President Lagarde to stress this at Thursday’s press conference (even if she concedes that overall risks are now roughly balanced).
• With implied hike pricing paring back a little further, the bar to a material market reaction on Thursday inches higher. Focus remains on the ECB’s updated macroeconomic projections and the characterisation of risks.
• Euribor futures are now flat to +1.0 ticks through the blues, with light upside concentrated in the whites/reds.