ITALY DATA: Stagnant Business Sentiment But Some Signs Of Tariff Reprieve
Italian business confidence was essentially stagnant in September, printing at 93.7 after 93.6 in July and August. That said, sentiment remains above the 2005-2019 average of 91.6. Details of the manufacturing and consumer confidence readings suggest some positive readthrough from lower US tariff policy uncertainty.
- The industry breakdown saw a tick up in services to 95.6 (vs 95.1 in August, 93.9 in July and 95.6 in June), but a more notable fall in retail to 101.6 (vs 102.7).
- Manufacturing and construction sentiment was largely steady. Against a backdrop of reduced US tariff uncertainty, the manufacturing export orders subcomponent rose to -23.9 (vs -24.4 in August and a YTD low of -26.3 in January).
- Consumer confidence was slightly stronger-than-expected at 96.8 (vs 96.5 cons, 96.2 prior). This was driven by consumer’s perceptions of the general economic environment (98.8 vs 97.0 prior), with the personal economic climate indicator little changed at 96.0.
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STIR: Dovish Adjustments In ECB Pricing As European Equities Soften
Dovish adjustments in EUR STIRs alongside the rally in wider core global FI markets, which comes with the recently flagged move lower in European equities.
- Liquid ECB-dated OIS pricing is little changed to ~2bp more dovish on the day, showing ~20bp of easing through June.
- Euribor futures are 1.0-3.5 higher.
- ERZ5 continues the recovery from multi-month lows registered on Monday
- ERZ6 0.5bp off the August high.
- Little of note on the Eurozone calendar today with this week’s focus set to fall on national level HICP data, due Friday.
- Early consensus based on the previews MNI has seen looks for the Eurozone-wide headline HICP reading (due September 2) to tick up a tenth to 2.1% Y/Y (on higher energy prices), while the core measure is expected to ease a tenth to 2.2% Y/Y (on softer services). Such a dynamic would be in line with the ECB's broader view of the inflation outlook and shouldn't have a material impact on market pricing.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Sep-25 | 1.919 | -0.8 |
Oct-25 | 1.895 | -3.3 |
Dec-25 | 1.828 | -9.9 |
Feb-26 | 1.801 | -12.6 |
Mar-26 | 1.752 | -17.5 |
Apr-26 | 1.739 | -18.8 |
Jun-26 | 1.725 | -20.3 |
EQUITY OPTIONS: Barclays Put Option
BARC (20/03/26) 350p, bought for 21.5 in 3.5k.
SONIA OPTIONS: Call Condor unwind
SFIZ5 96.10/96.25/96.40/96.55c condor, sold at 4.5 in 4k (said to be an unwind).
