USDCAD TECHS: Corrective Cycle

Gilt Opening calls, 93.28/93.34 range.

Set for a steadier open:

• Estox 50: +0.24%.
• Dax: +0.16%.
• CAC: +0.17%.
• FTSE: +0.19%.
• SMI: +0.18%.

Modest dovish adjustments in GBP STIRs vs. settlement levels, with Bunds & Tsys firming overnight.

• SONIA futures last flat to +2.5.
• SFIZ5 & Z6 trade through their June highs, with bulls now looking to the nearby May 9 & May 8 highs in the respective contracts.
• BoE-dated OIS is little changed to 0.5bp more dovish across ’25 meetings, showing 20.5bp of easing for August, 28bp through September, 46bp through November and 56bp through year-end.
• Dovish moves have failed to break the 55-56bp of cuts through December area in recent weeks.
• We still point to 2x 25bp cuts from the BoE through year-end (August & November) at this stage, although risks are skewed dovishly.
• Final manufacturing PMI data is due this morning.
• Elsewhere, BoE Governor Bailey will appear on a panel alongside Fed’s Powell, ECB’s Lagarde, BoJ’s Ueda and BoK’s Rhee (from 14:30 London). We heard from Bailey twice last week, and he didn’t really say anything to guide future policy in either appearance. We expect more of the same.