ECB: Wunsch: ECB "Essentially" In A Good Place
"*WUNSCH: RISKS A BIT MORE ON DOWNSIDE FOR INFLATION" Bloomberg
"*WUNSCH: ECB ESSENTIALLY IN A GOOD PLACE" bbg
Worth noting that Wunsch said risks were broadly balanced earlier this morning. We wouldn't read much into this headline at this stage, and assume his prior stance still holds.
Earlier headlines:
- "*ECB'S WUNSCH: PROBABILITY OF ANOTHER CUT HAS BEEN RECEDING" bbg
- "*ECB'S WUNSCH: INFLATION RISKS ARE BROADLY BALANCED"
"*ECB'S WUNSCH: STILL NEED TO MONITOR SERVICES INFLATION"
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GREECE AUCTION PREVIEW: On offer tomorrow
The PDMA will look to sell up to E250mln of the on-the-run 10-year .625% Jun-35 GGB (ISIN: GR0124041758) at its scheduled auction tomorrow.
EURIBOR OPTIONS: Call Condor Buyer
ERH6 98.125/98.25/98.4375/98.625c condor, bought for 2.5 in 5k.
GILTS: Off Lows, Following Tsys
UK paper has mostly looked to cues from Tsys over the past couple of hours.
- A downtick in global equity index benchmarks may also be providing some background support in recent trade.
- Futures last 91.32 after a recovery from lows of 91.22, ultimately sticking within the range established over the past couple of sessions. A bullish cycle remains in play. Initial resistance at 91.82. Initial support at 90.65.
- Yields 1.5-2.5bp higher, 5- to 10-Year zone under the most pressure.
- SONIA futures little changed to -3.0, SFIZ5 & Z6 have failed to retest lows seen in recent weeks/months.
- BoE-dated OIS continues to consolidate at hawkish cycle extremes, showing ~8bp of easing through year-end, with the next 25bp cut not fully discounted until the April ’26 meeting.
- CPI data headlines the local calendar tomorrow; our full preview of the release is available here.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Sep-25 | 3.976 | +0.9 |
Nov-25 | 3.935 | -3.2 |
Dec-25 | 3.890 | -7.7 |
Feb-26 | 3.787 | -18.0 |
Mar-26 | 3.752 | -21.5 |
Apr-26 | 3.681 | -28.6 |
