STIR: Year-end Implied ECB Rates Still Within Recent Ranges Post Fed
ECB-dated OIS price 47.5bps of easing through year-end, 2bps more dovish than yesterday’s close following the FOMC decision and press conference. However, the December ’25 implied deposit rate of just over 2% remains consistent with post-March ECB decision ranges.
- ECB President Lagarde speaks in a Parliamentary hearing at 0800GMT. The text will be released on the ECB’s website. We don’t expect major deviations from the March guidance, given the lack of regional economic data since March 6th. Focus remains on next Monday’s flash PMIs.
- Several other speakers are also scheduled today, including Chief Economist Lane.
- Euribor futures are off session highs at typing, but remain +1.0 to +2.5 ticks through the blues versus yesterday’s settlement levels. The March 11 high contained upside in Z5 overnight, but contracts further out the strip registered fresh multi-week highs following the Fed before fading this morning.
- Cross market cues will also be eyed today, with central bank decisions from Sweden, Switzerland and the UK due.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Apr-25 | 2.278 | -13.8 |
| Jun-25 | 2.100 | -31.6 |
| Jul-25 | 2.054 | -36.2 |
| Sep-25 | 1.984 | -43.2 |
| Oct-25 | 1.969 | -44.7 |
| Dec-25 | 1.942 | -47.5 |
| Feb-26 | 1.942 | -47.5 |
| Mar-26 | 1.948 | -46.8 |
| Source: MNI/Bloomberg. | ||
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UK DATA: AWE and PAYE Wage Data Both Softer - But RTI Data Showing Trend Lower
- Looking at the change in private regular AWE (which came in at 6.22%Y/Y in the 3-months to December, a little lower than the 6.29% pencilled in by the BOE's MPR), we think that the slight downside surprise was broadly equally attributable to both the fresh December data and a downward revision to November.
- There was no revision to the high 6.68%Y/Y for the single month October print, but the single month November print was revised down to 5.90%Y/Y from 6.12%Y/Y (leaving the 3-month November print at 5.89%Y/Y, down from 5.96%). The single month print for December was 6.09%Y/Y.
- However, looking at the PAYE RTI wage data, there was a more meaningful revision and continued downside momentum. The flash estimate for January 2025 came in at 5.01%Y/Y - that is the lowest since April 2022. December was revised down to 5.20%Y/Y from 5.41%. Like in the AWE data there is a temporary spike higher in the October print.
- As can be seen from the chart below, the HMRC PAYE RTI median pay growth continues to trend downwards.
EGB OPTIONS: Bund put fly
RXM5 127.50/126.50/125.50p fly, bought for 5.5 in 3k.
GOLD TECHS: Trend Needle Points North
- RES 4: $3000.0 - Psychological round number
- RES 3: $2996.9 - 4.0% 10-dma envelope
- RES 2: $2962.2 - 2.00 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 1: $2942.7 - High Feb 11 and the bull trigger
- PRICE: $2913.8 @ 07:19 GMT Feb 18
- SUP 1: $2864.2 - Low Feb 12
- SUP 2: $2833.2 - 20-day EMA
- SUP 3: $2807.3 - Low Feb 4
- SUP 4: $2756.5 - 50-day EMA
A bull cycle in Gold remains in play and the yellow metal continues to hold on to the bulk of its recent gains. Fresh highs once again confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend. Sights are on the $2962.2, a Fibonacci projection. The first key support to watch is $2833.2, the 20-day EMA.
