RENEWABLES: German Wind Output Forecast Comparison

• Mann: "I continue to believe that the MaPS assessment of a neutral rate of around 3.25-3.5% for Bank Rate is about right. This is higher than the neutral rate embodied in the forecast – where long-term R* was estimated to have to fallen to around 0-1% with a most likely estimate of ¼ percent in real terms. Together with the inflation target this implies a nominal neutral rate of 2¼ percent."
• Some dovish comments in her Report but the above is in line with her previous view.

He hadn't really given a strong view on this before, had just pointed to the 2-4% range.

• "From my perspective, in terms of my assumption for the neutral rate, my starting point is that it has certainly risen since we last provided a full analysis in 2018 and most likely now lies relatively close to the middle of the 2-4% range. I therefore judge that our policy stance continues to be restrictive."
• "Absent any unforeseen shocks, I therefore think we can have increasing confidence that the currently restrictive level of Bank Rate will support the disinflation process, and bring headline inflation below 3% by spring 2026 and back towards the 2% target by 2027, in line with our central forecast. "

SOFR options revolving around puts, put spds since the open, fading the modest rebound in underlying futures. Projected rate cut pricing currently: Dec'25 at -24bp, Jan'26 at -30.6bp, Mar'26 at -37.5bp, Apr'26 at -43.6bp.

• +4,000 SFRZ6 98.00/99.00 call spds, 4.25
• +2,500 2FQ6 96.37/96.62 put spds, 6.0 ref 96.705
• +5,000 0QM6 96.25 puts, 5.0 ref 96.83
• +5,000 SFRF6 96.25/96.31 put spds w/ 96.25/96.37 put spd strip, 3.25 ref 96.43
• +5,000 SFRF6 96.25/96.31/96.37 put trees, 1.25 ref 96.43
• +20,000 SFRH6 96.12 puts, 1.0 ref 96.43