STIR: BoE Hike Still Priced Through Year-End, Cross Market Cues Eyed
GBP STIRs little changed vs. settlement levels with oil edging away from post settlement highs and T...
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STIR: Limited Reaction In EUR STIRs To Overnight Mid East Developments
Front-month oil/gas futures are higher this morning after the US intercepted a “surprise attack” from IRGC and Iran rejected Oman’s proposal for joint management of the Strait of Hormuz. While front-month crude is up 3.5% to $87/bbl, it’s still well below last weeks highs of over $100. Markets may be waiting for President Trump’s reaction to overnight developments before assessing the likelihood of a renewed escalation.
- That leaves Euribor futures up to 2.0 ticks lower through the blues – a relatively contained reaction.
- ECB-dated OIS price 22bps of hikes through September and 41.5bps through year-end. The rhetoric from ECB speakers suggests the bar to not hiking in September is high, but there may be more scope to unwind terminal rate hike pricing under a credible de-escalation scenario in the Middle East.
- Today’s regional calendar includes the ECB wage tracker. Lagarde noted at last week’s press conference that “ The ECB’s wage tracker and surveys on wage expectations continue to indicate moderate wage growth over the coming quarters.”
- The FOMC decision remains the primary focal point for global markets today.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) | 1d | delta |
| Sep-26 | 2.406 | 22.2 | 22.0 | 0.2 |
| Oct-26 | 2.475 | 29.1 | 28.6 | 0.5 |
| Dec-26 | 2.599 | 41.5 | 39.5 | 2.0 |
| Feb-27 | 2.624 | 44.0 | 44.0 | 0.0 |
| Mar-27 | 2.711 | 52.7 | 49.3 | 3.4 |
| Apr-27 | 2.728 | 54.4 | 49.4 | 5.0 |
| Jun-27 | 2.741 | 55.7 | 51.3 | 4.4 |
| Jul-27 | 2.741 | 55.7 | 52.3 | 3.4 |
| Sep-27 | 2.737 | 55.3 | 51.7 | 3.6 |
| Source: MNI/Bloomberg Finance L.P. | ||||
EURJPY TECHS: Bull Cycle
- RES 4: 188.45 1.236 proj of the May 6 - Jun 16 - 24 price swing
- RES 3: 187.95 High Apr 17 and the bull trigger
- RES 2: 187.56 High Apr 30
- RES 1: 186.74 High Jul 27
- PRICE: 186.30 @ 08:01 BST Jul 29
- SUP 1: 185.71/35 20- and 50-day EMA
- SUP 2: 184.31 Low Jul 13
- SUP 3: 183.78/183.17 Low Jul 2 / Low Jun 24 and a key support
- SUP 4: 182.05 Low May 06 and a bear trigger
EURJPY remains bullish. The cross has breached two S/T resistance points; 185.86, the Jun 30 high, and 186.32, the Jun 16 and 17 high. Clearance of both levels highlights a bullish development and exposed 186.56 (pierced), the 76.4% retracement of the Apr 17 - Jun 5 bear leg. A clear break of 186.56 would open 187.56, the Apr 30 high. Initial firm support is 185.35, the 50-day EMA. A clear breach of the EMA would signal a possible reversal instead.
EQUITIES: EU Cash Opening Calls
Estox 50: +0.26%, Dax: +0.08%, CAC: +0.58%, FTSE +0.41%, SMI +0.48%.
