EUROPEAN INFLATION: Sep Flash HICP Due Next Wed: Headline Up On Energy
Sep-26 13:10
The Eurozone September flash inflation reading is due on Wednesday, with country-level data coming from Spain on Monday and France, Germany and Italy on Tuesday. Early consensus sees the Eurozone-wide headline reading increasing three tenths to 2.3% Y/Y on an energy base effect, while core is expected to remain steady at 2.3% Y/Y.
- MNI’s full Eurozone inflation preview will be released on Monday, following the Spanish flash data.
- Markets have been paring back expectations of another ECB rate cut steadily since the September decision, where President Lagarde expressed confidence in the medium-term inflation outlook and noted that growth risks are now “more balanced”.
- However, with just under 10bps of easing priced through July 2026, markets may still be sensitive to a downside core surprise. Some more dovish ECB officials continue to stress that inflation risks are tilted to the downside.
- Headline HICP inflation is expected to increase across the four major Eurozone economies, most notably in France and Italy.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
SECURITY: E3 Edges Closer to Triggering Snapback Sanctions On Iran
Aug-27 13:10
Reuters reports that Britain, France and Germany, the ‘E3’ signatories to the 2015 Iran nuclear deal, “are likely to begin the process of reimposing UN [snapback] sanctions on Iran on Thursday.”
- The report notes that the group still maintains hope that Tehran will “provide commitments over its nuclear programme within 30 days that will convince them to defer concrete action,” according to four diplomats.
- As the US withdrew from the Iran nuclear deal during President Donald Trump’s first term, Washington has no direct input into the snapback mechanism. If the E3 chooses to trigger the snapback, then punitive UN sanctions on Iran's financial, banking, hydrocarbons, and defence sectors will take effect in 30 days.
- The Reuters report supports a piece from Bloomberg earlier, which noted that the E3 will “maintain contacts in coming days” after talks on Tehran’s nuclear program concluded in Geneva on Tuesday without a breakthrough.
- Iranian foreign ministry spokesperson Esmaeil Baghaei told state television today that Iran wants to “make use of all diplomatic capacities” following Tuesday’s meeting in Geneva, per Bloomberg.
US TSYS: Curve Steeper
Aug-27 13:03
2s30s briefly tops 130bp, registering the highest level seen since January ’22.
- The ’22 high (133.8bp) presents the next upside level of note in the spread.
- Moves comes as OATs lead a leg of weakness in long end EGBs.
- Meanwhile, although NY Fed President Williams stresses that the risks to the labour market and inflation are moving closer towards being balanced, along with each Fed meeting being “live” and the need to bring rates down over time, he doesn’t make a strong case for a rate cut in Sep, leaving OIS pricing for that meeting little changed at ~22bp of easing.
SOFR OPTIONS: BLOCK: Sep'25 SOFR Call Condors
Aug-27 13:01
- 5,700 SFRU5 96.00/96.06/96.18/96.25 call condors 0.5 ref 95.89 at 0846:01ET
