ISRAEL: IDF Strikes On Hezbollah Underway In Southern Lebanon
Nov-06 14:17
An Israeli Defence Forces spox has confirmed that strikes are underway against Hezbollah military targets in southern Lebanon. Evacuation notices were sent to residents in specific areas of three villages (rather than large-scale evacuations) ahead of the strikes, according to the spox.
- The IDF claims that the strikes are intended to hit Hezbollah infrastructure "in response to its prohibited attempts to rebuild its activities in the area." Hezbollah has delivered an official letter to the Lebanese president, PM, and speaker of parliament claiming the group has a "legitimate right" to defend itself in the face of "Israeli violations."
- Since the ceasefire agreed in late 2024, IDF strikes in Lebanon have been rare, with the last taking place in September.
- The Israeli invasion of 2024 destroyed a large proportion of Hezbollah's infrastructure and killed a significant proportion of the terrorist group's top commanders, including leader Hassan Nasrallah. The Iranian-backed group is no longer believed to pose an existential security threat to Israel, and as such, these strikes are unlikely to result in major destabilisation along the border.
- Risks remain if other members of the Iran-aligned 'axis of resistance', such as the Houthi rebels in Yemen or Hamas in Gaza, use the strikes as an excuse to launch their own strikes on Israel/Israel-related targets.
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EQUITY OPTIONS: Estoxx Put Seller
Oct-07 14:13
SX5E (19th Dec) 5400p, sold at 80.5 and 80.4 in 10.1k.
GILTS: Off Lows Alongside Bunds
Oct-07 14:02
Gilts rally from session lows alongside a similar move in Bunds, with support in the German benchmark holding.
- Gilt futures based at 90.34, ahead of initial support at 90.26.
- Yields 1-2bp higher on the day, Initial resistance points intact across the curve.
- 10s last ~4.75%, comfortably within the 4.60-4.80% multi-week closing range.
- International political developments and cross-market moves have provided the major inputs for gilt markets early this week.
- UK fiscal risks continue to point towards the potential for further curve steepening, particularly with 2s10s and 5s30s back from recent highs.
- BoE-dated OIS still shows ~5bp of easing through year-end, which we believe underestimates the odds of a rate cut in Q4.
- SONIA futures flat to -2.5, cycle lows in SFIZ5 & Z6 remain untouched.
- Comments from BoE chief economist Pill are due Wednesday, along with a GBP5bln sale of the new 4.00% May-29 gilt.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Nov-25 | 3.961 | -0.1 |
Dec-25 | 3.919 | -4.8 |
Feb-26 | 3.814 | -15.3 |
Mar-26 | 3.785 | -18.2 |
Apr-26 | 3.711 | -25.7 |
Jun-26 | 3.687 | -28.0 |
Jul-26 | 3.639 | -32.8 |
Sep-26 | 3.631 | -33.7 |
MNI: CANADA SEP IVEY PURCHASING MANAGERS INDEX 59.8 SA
Oct-07 14:00
- CANADA SEP IVEY PURCHASING MANAGERS INDEX 59.8 SA
