STIR: BoE Pricing Steady After Noisy GDP
Little readthrough for GBP STIRs following the softer-than-expected GDP data.
- BoE-dated OIS prices 20.5bp of easing through year-end, 31.5bp through February, 41bp through February and 52bp through year-end.
- SONIA futures essentially flat.
- At first glance it looks as though the majority of the weakness in GDP is driven by the Jaguar Land Rover shutdown in September (production was halted for the entire month).
- On the flip side services were stronger than expected on a M/M basis but there were downward revisions to earlier months that impacted the quarterly rate.
- The overwhelming conclusion to draw from this is that there is a lot of noise in this print and it's hard to really draw a strong conclusion from it without going into granular detail. This explains the lack of movement in the short end.
- Next week’s CPI data presents the next major scheduled UK risk event.
- We have previously noted that in line releases in the next 2 inflation reports would likely be enough to push Governor Bailey to vote for a rate cut in December, cementing a cut (assuming the weakness in the labour market data isn’t revised away and that the views of the other MPC members remain entrenched).
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.764 | -20.5 |
Feb-26 | 3.655 | -31.5 |
Mar-26 | 3.559 | -41.0 |
Apr-26 | 3.448 | -52.1 |
Jun-26 | 3.400 | -57.0 |
Jul-26 | 3.348 | -62.1 |
Sep-26 | 3.330 | -63.9 |
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STIR: Euribor Futures Extending Higher Alongside Global Peers
Euribor futures continue to move away from September’s multi-month lows, currently +0.5 to +4.0 ticks through the blues versus yesterday’s settlement levels. As detailed in earlier bullets, the combination of increased US/China tensions and the softer-than-expected UK labour market report have contributed to today’s uptick in global rates markets.
- ERZ6 is +4.5 ticks at 98.115. The contract has now more than reversed hawkish repricing seen following the ECB’s September decision, and has pierced trendline resistance drawn from the April 22 high this morning.
- We highlighted yesterday that the past week's Euribor options activity has been healthy, and generally skewed towards dovish call structures.
- ECB-dated OIS price 18bps of easing through July 2026, up from under 10bps last week.
- Although the median ECB official agrees that policy rates are currently in a “good place”, we’ve highlighted that the door is still being kept open to another cut if justified by the data and risk outlook.
- We think key barometers for a shift in the median Governing Council view would be e.g. Kazaks and Stournaras (Villeroy, Rehn and Simkus have already publicly leant to the dovish side).
- Today’s regional data calendar is light, with only the October German ZEW survey due. German final HICP confirmed flash estimates earlier.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Oct-25 | 1.922 | -0.4 |
| Dec-25 | 1.886 | -4.0 |
| Feb-26 | 1.864 | -6.2 |
| Mar-26 | 1.806 | -12.0 |
| Apr-26 | 1.786 | -14.0 |
| Jun-26 | 1.756 | -17.0 |
| Jul-26 | 1.746 | -18.0 |
| Sep-26 | 1.743 | -18.3 |
| Source: MNI/Bloomberg Finance L.P. | ||
Figure 1: ERZ6 Future (Source: Bloomberg Finance L.P.)
BOBL TECHS: (Z5) Breaches A Key Resistance
- RES 4: 119.000 Round number resistance
- RES 3: 118.818 61.8% of the Apr 7 - Aug 15 bear leg (cont.)
- RES 2: 118.680 2.000 proj of the Oct 6 - 8 - 9 price swing
- RES 1: 118.560 Intraday high
- PRICE: 118.540 @ 08:29 BST Oct 14
- SUP 1: 118.150/117.943 Low Oct 13 / 20-day EMA
- SUP 2: 117.710 Low Oct 6
- SUP 3: 117.630 Low Oct 1
- SUP 4: 117.470 Low Sep 25 and a key support
A strong rally in Bobl futures on Friday followed by a bullish start to this week’s session reinforces the current uptrend that started Sep 25. The break higher has resulted in a breach of resistance at 118.400, the Sep 8 and 10 high. This break strengthens a bullish condition and sights are on 118.680, a Fibonacci projection. On the downside, initial key support lies at 117.943, the 20-day EMA. A breach of this EMA is required to signal a possible reversal.
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