STIR: 90% Odds Of Dec BoE Cut Priced, Support In SFIZ6 & SFIZ7 Holds
Spillover from the FOMC decision provides a dovish impulse for the GBP short end this morning. * Bo...
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STIR: Soft Labour Market Data Drives Dovish GBP Rates Move, Dec Cut 80% Priced
Dovish moves in GBP STIRs in the wake of the soft labour market data.
- Softer-than-expected private sector wage metrics of particular note, with our macro team categorising the data as soft across the board.
- BoE-dated OIS 3-7bp more dovish across liquid contracts. 20.5bp of easing priced for December, 31bp through February and 39bp through March.
- SONIA futures little changed to +7.0.
- SFIZ6 trades through its October high but fails to test year-to-date highs (96.700).
- SFIZ5/Z6 1.0 off October lows.
- GBP 1y1y within 2bp of October lows and 5bp of year-to-date lows.
- A reminder that BoE Governor Bailey is viewed as the key swing voter after the 5-4 vote to leave rates unchanged earlier this month (Bailey voted for no change).
- This morning’s data increases the odds of him voting for a cut in December, particularly after the communication that accompanied the November decision lowered the bar for such a move.
- Still, we've got one more labour market print and 2 CPI releases before the next decision.
- With the other 8 MPC members having entrenched views and what they are watching clearly set out in the individual view paragraphs in the meeting minutes, market volatility around non-Bailey speeches is likely to be much reduced
- On that note, hawkish dissenter Greene will speak this morning (08:30).
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.764 | -20.6 |
Feb-26 | 3.662 | -30.8 |
Mar-26 | 3.581 | -38.9 |
Apr-26 | 3.473 | -49.7 |
Jun-26 | 3.427 | -54.3 |
Jul-26 | 3.373 | -59.7 |
Sep-26 | 3.350 | -62.0 |
EQUITY TECHS: E-MINI S&P: (Z5) Bullish Recovery
- RES 4: 7000.00 Psychological round number
- RES 3: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 2: 6974.04 3.382 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 1: 6867.00/6953.75 Intraday high / High Oct 30 and bull trigger
- PRICE: 6850.50 @ 07:23 GMT Nov 11
- SUP 1: 6655.70 Low Nov 7 and key short-term support
- SUP 2: 6571.25 Low Oct 17
- SUP 3: 6540.25 Low Oct 10 and a key support
- SUP 4: 6476.62 23.6% retracement of the Apr 7 - Oct 30 bull cycle
The trend condition in S&P E-Minis remains bullish and the pullback since the Oct 30 high appears corrective. The contract has managed to find support below the 50-day EMA, currently at 6716.03 and a key support. Friday’s activity also highlights a potential reversal signal - a bullish doji candle. This defines key support at 6655.50, the Oct 7 low. A continuation higher would signal the end of a correction and open 6953.75, Oct 30 high and bull trigger.
WTI TECHS: (Z5) Bullish Corrective Cycle
- RES 4: $71.47 - High Jun 23 and a key medium-term resistance
- RES 3: $67.68 - High Jul 30
- RES 2: $65.77/68.43 - High Sep 26 and key resistance
- RES 1: $62.59 - High Oct 24
- PRICE: $59.81 @ 07:19 GMT Nov 11
- SUP 1: $58.83/55.96 - Low Nov 6 / Low Oct 20 and bear trigger
- SUP 2: $54.85 - Low May 5
- SUP 3: $54.16 - Low Apr 9 and a key support
- SUP 4: $53.23 - 1.764 proj of the Jul 30 - Aug 13 - Sep 26 price swing
Recent weakness in WTI futures appears to be a flag formation - a bullish continuation pattern. This suggests that an upward corrective cycle remains intact for now. Price has recently traded through the 50-day EMA, at $60.84, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, Sep 26 high. The bear trigger is $55.96, the Oct 20 low.
