STIR: BoE Pricing Steady, DMP Eyed
GBP STIRs little changed with core global FI markets in line to a touch softer than levels that prevailed around the time of yesterday’s SONIA settlement window.
- BoE-dated OIS prices 22bp of easing for this month, 28.5bp through February, 37.5bp through March, 48.5bp through April and 53.5bp through June.
- SONIA futures flat to -1.0.
- November’s year-to-date highs in SFIZ6 remains untouched, 5.0 away from current levels.
- Terminal rate pricing steady around 3.35%, with forays below 3.30% limited and short-lived in recent weeks.
- The latest BoE DMP survey is due today. The MPC will be looking to see if the survey signals a slowing in pipeline wage pressure, which would give them greater confidence re: the process of ongoing disinflation. Such a signal would also provide even greater confidence when it comes to resuming the easing cycle at the Bank’s December meeting.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.752 | -21.9 |
Feb-26 | 3.685 | -28.6 |
Mar-26 | 3.597 | -37.4 |
Apr-26 | 3.488 | -48.3 |
Jun-26 | 3.437 | -53.4 |
Jul-26 | 3.372 | -59.9 |
Sep-26 | 3.353 | -61.8 |
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EURJPY TECHS: Approaching Support At The 20-Day EMA
- RES 4: 180.37 1.500 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 3: 180.00 Psychological round number
- RES 2: 178.94 1.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 1: 178.82 High Oct 30 and the bull trigger
- PRICE: 176.80 @ 07:33 GMT Nov 4
- SUP 1: 176.65 20-day EMA
- SUP 2: 175.00 50-day EMA
- SUP 3: 173.92 Low Oct 6 and a gap high on the daily chart
- SUP 4: 173.36 Bull channel support drawn from the Feb 28 low
The trend structure in EURJPY is bullish and the latest pullback is considered corrective. The cross traded to a fresh cycle high last Thursday, confirming a resumption of the primary uptrend. This opens 178.94 next, a 1.236 projection of the Jul 31 - Sep 29 - Oct 2 price swing. Initial support to watch lies at 176.65, the 20-day EMA. A clear breach of this average would signal scope for a deeper correction. The bull trigger is at 178.82, the Oct 30 high.
UK FISCAL: Reeves' speech may refer to "speculation", making "choices necessary"
- The Telegraph reports that the line "At that Budget, I will make the choices necessary to deliver strong foundations for our economy – for this year, and years to come" will be in the speech. They note that these point directly to a manifesto breach and indeed the title of the story is "Reeves preparing to break manifesto pledge at Budget." The "necessary" line reported by the Telegraph is also being reported by The Times and Sky News.
- The wording seen by the wider press is slightly less explicit and doesn't mention the necessary choices line: "You will all have heard a lot of speculation about the choices I will make. I understand that - these are important choices that will shape our economy for years to come. But it is important that people understand the circumstances we are facing, the principles guiding my choices – and why I believe they will be the right choices for the country." The wording quoted here was taken from the BBC but is very similar to that the Guardian is reporting (and the Telegraph, Times and Sky News all see this wording included too).
WTI TECHS: (Z5) Monitoring Resistance
- 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: $60.74 @ 07:16 GMT Nov 4
- SUP 1: $59.64/55.96 - Low Oct 23 & 30 / 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
WTI futures remain in a corrective cycle for now. Note that price has recently traded through the 50-day EMA, currently at $61.05. The breach of this EMA signals scope for a stronger recovery. Note too that a resistance at $62.34, the Oct 8 high, has also been pierced. A clear move through it would expose key resistance at $65.77, the Sep 26 high. First key support and the bear trigger is unchanged at $55.96, the Oct 20 low
