STIR: 100bp Of BoE Cuts Priced Through Year-End
May-01 13:07
GBP STIRs continue to drift in a dovish direction, with U.S. data, softer oil prices the extension of the rally in core global bonds allowing the recent dovish repricing to develop further.
- BoE-dated OIS now prices in 100bp of cuts through year-end, registering fresh cycle extremes.
- 26bp of easing is priced for next week’s meeting, 40.5bp through June, 62.5bp through August.
- We have previously outlined the potential for a guidance tweak at the May MPC, which could pave the way for rate cuts at the next three meetings. Market pricing has become more reflective of this idea.
- SONIA futures are 0.75-6.5 firmer. SFIZ5-Z7 are through April highs, with October/September highs now in focus across those contracts.
- SFRIM5/M6 & GBP 1y1y, two vehicles we highlighted as standout choices for dovish expressions in recent weeks, have registered fresh dovish cycle extremes today.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
May-25 | 4.199 | -26.1 |
Jun-25 | 4.054 | -40.5 |
Aug-25 | 3.832 | -62.7 |
Sep-25 | 3.683 | -77.7 |
Nov-25 | 3.517 | -94.2 |
Dec-25 | 3.455 | -100.4 |
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US DATA: Johnson Redbook Retail Sales Slows On Easter Effect, Still Solid
Apr-01 13:06
Johnson Redbook Retail Sales were up 5.3% Y/Y in March month-to-date (as of the week ending March 29), after sales in the 4th week of the month slowed to 4.8% Y/Y (5.6% prior).
- The apparent dip in retail activity at the end of the month requires some context: last year saw pre-Easter shopping, which hurts the Y/Y comparisons this year, but "these differences are expected to balance out in April as Easter sales begin, leading to improved growth rates compared to last year's retail performance in April. Most retailers recommend smoothing the Easter distortion by averaging the performance data from March and April."
- Overall we consider this to be solid "hard" retail data, with the Johnson Redbook report covering around 80% of "official" retail sales (March data for which is out on Apr 16).
MNI: US REDBOOK: MAR STORE SALES +5.3% V YR AGO MO
Apr-01 12:55
- MNI: US REDBOOK: MAR STORE SALES +5.3% V YR AGO MO
- US REDBOOK: STORE SALES +4.8% WK ENDED MAR 29 V YR AGO WK
EQUITIES: BNP put spread
Apr-01 12:49
BNP (19th Dec) 76/60ps, sold at 6.1 in 2.5k.
