GILTS: Early Demand Stalls As Risk Sentiment Stabilises
Nov-18 10:39
Gilts initially drew support from a move lower in global equity markets, before stabilsation in wider risk sentiment and an uptick from session lows in crude oil limited demand.
- Gilt futures trade +8 at 92.47 vs. highs of 92.60.
- Initial support and resistance located at 91.94 & 92.85. Our technical analyst still deems the recent weakness to be corrective at this stage.
- Yields ~0.5bp lower across the curve.
- 2s10s and 5s30s got within 1bp of October closing highs.
- Gilt/Bunds 1.5bp wider at 183.5bp after failing to push above 185bp in recent sessions, still holding most of the recent recovery from sub-175bp.
- The GBP.125bln tender of the 4.75% Dec-30 line passed smoothly.
- BoE-dated OIS pricing 18.5bp of easing for December (~75% odds of a cut).
- SONIA futures little changed to +2.0, with SONIA-implied BoE terminal rate pricing little changed on the day, at 3.39%.
- Comments from BoE’s Pill (voted to leave rates unchanged earlier this month) & Dhingra (the most dovish MPC member) are due today.
- A reminder that we do not expect much market vol. to stem from any non-Bailey BoE comments in the lead up to the December decision, given the entrenched views of the other MPC members (Bailey is deemed the key swing voter).
- Immediate focus remains on tomorrow’s inflation data (click for our full preview) and next week’s Budget.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.785 | -18.4 |
Feb-26 | 3.697 | -27.3 |
Mar-26 | 3.619 | -35.0 |
Apr-26 | 3.519 | -45.0 |
Jun-26 | 3.476 | -49.3 |
Jul-26 | 3.427 | -54.2 |
Sep-26 | 3.404 | -56.5 |
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
Oct-17 20:51
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
Oct-17 20:30
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Oct-17 20:28
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
