GILTS: Curve Steepens After Fed
Sep-19 07:34
Gilts steepen, spill over from U.S. curve seen post-Fed.
- Lows of 100.07 in futures before a move back to ~100.25.
- Initial support was broken during yesterday’s sell off, although technicals in the contract remain bullish.
- Next support comes in at the 20-day EMA (100.03), while initial resistance is located at yesterday’s high (101.06).
- Yields flat to -3bp.
- BoE-dated OIS is little changed to a couple of bp more dovish vs. yesterday’s closing levels. ~2.5bp of cuts priced for today’s decision, ~48bp of cuts showing through year-end (see our pre-gilt open bullet for more colour there).
- The BoE is unanimously expected to leave bank rate unchanged today.
- Focus will quickly move to the vote split (our macro team looks for 2 dovish dissenters) and accompanying rhetoric.
- The QT decision will also provide some interest.
- Our macro team’s baseline scenario looks for a ~GBP110bln BoE QT pace during Oct ’24-Sep ’25 (vs. consensus of GBP100bln).
- We outlined the QT announcement’s potential impact on swap spreads yesterday.
- We will provide more on the announcement’s potential impact on outright gilts this morning.
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RIKSBANK CAN CUT 2-3 TIMES MORE THIS YEAR IF PRICE OUTLOOK STAYS SAME
Aug-20 07:34
- RIKSBANK CAN CUT 2-3 TIMES MORE THIS YEAR IF PRICE OUTLOOK STAYS SAME
RIKSBANK CAN CUT 2-3 TIMES MORE THIS YEAR IF PRICE OUTLOOK STAYS SAME
Aug-20 07:34
RIKSBANK CAN CUT 2-3 TIMES MORE THIS YEAR IF PRICE OUTLOOK STAYS SAME
RIKSBANK: Dovish Tilt In Guidance, But In Line With Expectations
Aug-20 07:33
Riksbank cuts rates by 25bps to 3.50% as unanimously expected.
Highlights from the policy statement:
- Riksbank opens the door to cuts at each of the three remaining meetings this year (as we had expected): “If the inflation outlook remains the same, the policy rate can be cut two or three more times this year”
- “Various indicators, such as producer prices and company pricing plans, have continued to imply that inflationary pressures are compatible with the target”.
- “The growth outlook in Sweden and abroad is somewhat weaker than in the most recently published forecast”.
Link here: https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/press-releases/2024/policy-rate-cut-by-0.25-percentage-points-to-3.5-per-cent/
