EU CREDIT UPDATE: Books Into Pricing

For the full MNI BOE Review, including updated summaries of over 20 sell side analysts click here.

• With guidance unchanged, the 7-2 vote as expected and little new of note in the Minutes we think there should have been little to change the prospect of a Q4-25 cut in the September MPC meeting.
• However 10/21 sell side analysts that we track have pushed back their expectations of the timing of their next cut (albeit analysts still remain more dovish overall than market pricing).
• We think that markets under-price the prospect of both a November and a December cut (corrected from September in initial post).
• We look at the implications of the decision to target a GBP70bln APF reduction over the next year and will be watching ILTR / STR operations closely in coming weeks as supply-led reserve balances move below the top of the Bank's PMRR (preferred minimum range of reserves).

• RES 4: 6787.63 1.382 proj of the Aug 1 - 15 - 20 price swing  
• RES 3: 6750.50 2.000 proj of the Aug 20 - 28 - Sep 2 price swing 
• RES 2: 6748.50 1.236 proj of the Aug 1 - 15 - 20 price swing    
• RES 1: 6731.50 High Sep 19  
• PRICE: 6712.50 @ 07:26 BST Sep 22
• SUP 1: 6602.01 20-day EMA
• SUP 2: 6536.50 Low Sep 8 
• SUP 3: 6487.14 50-day EMA 
• SUP 4: 6417.25 Low Aug 12 

A bull cycle in S&P E-Minis remains intact and the contract traded to a fresh cycle high on Friday. Price has breached the 6700.00 handle and this signals scope for an extension towards 6748.50, a Fibonacci projection point. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Initial support to watch lies at 6602.01, the 20-day EMA.

For the full MNI BOE Review, including updated summaries of over 20 sell side analysts click here.

• With guidance unchanged, the 7-2 vote as expected and little new of note in the Minutes we think there should have been little to change the prospect of a Q4-25 cut in the September MPC meeting.
• However 10/21 sell side analysts that we track have pushed back their expectations of the timing of their next cut (albeit analysts still remain more dovish overall than market pricing).
• We think that markets under-price the prospect of both a November and a December cut.
• We look at the implications of the decision to target a GBP70bln APF reduction over the next year and will be watching ILTR / STR operations closely in coming weeks as supply-led reserve balances move below the top of the Bank's PMRR (preferred minimum range of reserves).