STIR: Stournaras Interview With MNI Policy Team Consistent With Market Pricing

In an interview with the MNI Policy Team yesterday, Bank of Greece Governor Stournaras struck a slightly more dovish tone than the median Governing Council member, in our view.  However, his comments, were consistent with current market pricing, which retains a modest easing bias. 

• Stournaras noted that “you will see most of the arguments are in favour of inflation and growth becoming lower but despite that we don’t jump to the conclusion that we should cut in the next meeting,”
• The ECB’s 2028 inflation projections, which will be presented in December for the first time, remain a hot topic in policymaker interviews. Stournaras’ remarks on the issue were quite pragmatic: While the projections will be a “key input” for the ECB, other data and “judgement” will play an important role. He suggested that he would be more concerned if spot inflation rates fall below target (Flash October headline was 2.1% Y/Y, core was 2.4%).
• ECB-dated OIS price ~12bps of easing through September 2026. Meanwhile, the Euribor Z5-U6 spread is -8.5 ticks, off mid-October lows of -16.5 ticks.
• French September industrial production was stronger-than-expected at 0.8% M/M (vs 0.1% cons, -0.9% prior). This followed a better-than-expected German factory orders reading earlier.
• October services PMIs (finals for France, Germany and the Eurozone) are due this morning, alongside Italian retail sales, the ECB’s latest wage tracker and Eurozone September PPI.
• ECB’s Villeroy, Nagel and Kocher are scheduled to speak today.