RUSSIA: State Duma Passes Bill to Amend Federal Budget

• The Banking sector (SX7E) leads in Europe, its best level since the 2nd April, and immediate resistance comes at 190.12, the April high.
• Estoxx futures (VGM5) is in turn underpinned, but trades in a small range and still short of the 5150.00 level, this was Yesterday's high, and best print since the 4th April.

• EUR Benchmark Long 10Y Fixed (Sept. 15, 2035) MS+54 Area
  • Coupon: Annual, act/act ICMA, short first
• Issuer: Finland Government Bond (RFGB)
• Ratings: Aa1/AA+ (Moody's/Fitch)
• Format: Reg S CAT1, registered, senior unsecured, 144a eligible, CAC, 0% rw
• Settlement: May 7, 2025
• Timing: May price today
• ISIN: FI4000587415
• Bookrunners: BNPP (B&D), Citi, CA-CIB, GS, Nordea

Details as per Bloomberg

There was a fairly limited reaction in ECB implied rates to the firmer-than-expected Spanish inflation data, which was offset somewhat by a weaker-than-expected Q1 flash GDP print. Meanwhile, Executive Board member Cipollone has struck a characteristically dovish tone in latest comments.

• ECB-dated OIS continue to price 64bps of easing through year-end. We wrote in our Eurozone inflation preview (here) that the April flash HICP round is not expected to have a material impact on market easing expectations, given the focus on tariff-related growth concerns. This also downplays the immediate importance of the Q1 flash GDP data.
• This morning, ECB’s Kazaks suggested sequential rate cuts can continue, though yesterday he pushed back on taking rates below neutral (we assume he means the ECB’s lower bound of 1.75%).
• OIS essentially fully price a 25bp cut through June, with 14bps of sequential cuts priced through July.
• Euribor futures are little changed through the blues.
• The ECB’s Consumer Inflation Expectations survey is due at 0900BST/1000CET, alongside March money supply/lending data. The EC’s consumer and business survey lands at 1000BST.