RATINGS: Stable Outlooks Set For Review After Close
Potential rating reviews of note scheduled for after hours on Friday include:
- Fitch on the Netherlands (current rating: AAA; Outlook Stable)
- Moody’s on Latvia (current rating: A3; Outlook Stable)
- Morningstar DBRS on the EFSF (current rating: AAA; Outlook Stable), the ESM (current rating: AAA; Outlook Stable), Portugal (current rating: A (high), Stable Trend) & Switzerland (current rating: AAA, Stable Trend)
- Scope Ratings on the EFSF (current rating: AA+; Outlook Stable) & the ESM (current rating: AAA; Outlook Stable)
- Click here to access the indicative 2026 sovereign rating review schedules across the five most prominent rating agencies (Fitch, Moody's, S&P, Morningstar DBRS & Scope Ratings).
- Note that the schedules are indicative only and ratings can be reviewed on an ad-hoc basis.
- Rating agencies may also adjust their schedules during the year.
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BTP TECHS: (H6) Recovery Extends
- RES 4: 121.33 High Oct 21 and a key resistance area
- RES 3: 121.37 High Nov 13
- RES 2: 121.24 High Nov 26
- RES 1: 120.34/77 Intraday high / High Dec 3
- PRICE: 120.28 @ 08:07 GMT Dec 17
- SUP 1: 119.54 Low Dec 12
- SUP 2: 119.13 Low Dec 10 and the bear trigger
- SUP 3: 118.00 Round number support
- SUP 4: 118.84 2.000 proj of the Nov 13 - 20 - 26 price swing
Gains in BTP futures appear corrective. However, the contract has traded above initial resistance at 120.17, the Nov 20 low. A continuation higher would signal scope for an extension towards 120.77, the Dec 3 high. On the downside, a reversal lower would refocus attention on key support at 119.13, the Dec 10 low and a bear trigger. Clearance of this level would confirm a resumption of the downtrend.
US TSY OPTIONS: TY Calls Lifted
Some upside exposure sought in recent trade:
- TYF6 113.50 calls paper paid 0-03 on ~4K over a few clips
- TYG6 114.00 calls paper paid 0-10 on 2.5K over a couple of clips
STIR: Risks To Tomorrow's ECB Decision More Balanced As Hawkish Repricing Fades
Risks to tomorrow’s ECB decision are becoming increasingly more balanced, with the EUR front-end fading a degree of recent hawkish repricing. ECB-dated OIS now price just 3bps of hikes the end of next year, down from an extreme of 10bps last Wednesday.
- Primary focus for tomorrow remains on the updated macroeconomic projections and the balance of risks to inflation and growth. Analysts expect upward revisions to both GDP and core HICP projections.
- We expect a repeat of a data-dependent and meeting-by-meeting approach, with no pre-determined path.
- MNI’s full ECB preview is here
- Markets still judge the next move in ECB rates to be a hike, with the ESTR 1y1y rate at 2.09% (versus an overnight rate of 1.93%). Improving regional growth momentum and the expected impulse from higher German fiscal spending have raised the bar to near-term cuts.
- Intraday, Euribor futures are +0.5 to +3.0 ticks through the blues, with dovish spillover from the softer-than-expected UK inflation report.
