POWER: IFA Power Link Curtailments to End Friday Afternoon
The unplanned curtailment of 500MW at the 2GW IFA power link between France and the UK is now scheduled to end one hour later on Friday 5PM GMT, remit data showed.
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GILTS: Looking To North America For Cues, Back From Highs
Gilts mostly look to U.S. Tsys & Fed pricing for cues in the wake of the U.S. CPI data.
- Rallying as a Dec Fed cut essentially moves to fully priced.
- Futures to fresh session highs at 95.57 before fading back to 95.35 last.
- Looks like the “hawkish” rate cut from the BoC provides some impetus here.
- Contract nowhere near fully unwinding the weakness seen over the last 2 sessions.
- Yields flat to 2.5bp lower on the day, bull steepening, once again taking cues from Tsys.
- Gilt/Bunds back below 220bp given relative betas to Tsys.
- SONIA futures now flat to +5.0, also shy of highs that came on the back of the U.S. CPI reading.
- BoE-dated OIS showing 81.5bp of cuts through ’25 vs. closer to 80bp for much of the day.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Dec-24 | 4.700 | +0.0 |
Feb-25 | 4.502 | -19.8 |
Mar-25 | 4.416 | -28.5 |
May-25 | 4.241 | -45.9 |
Jun-25 | 4.162 | -53.8 |
Aug-25 | 4.034 | -66.6 |
Sep-25 | 3.999 | -70.1 |
Nov-25 | 3.922 | -77.8 |
Dec-25 | 3.886 | -81.4 |
SONIA: SFIM5 96.15/96.45/96.75 Call Fly Lifted
SFIM5 96.15/96.45/96.75 call fly paper paid 3.75 on 25K
CAD: CAD/JPY Uptrend Firms Further on Hawkish 50bpc BoC Cut
As noted above, USD/CAD slips sharply on the back of the BoC decision - dragging the pair through to new daily lows of 1.4127 and through yesterday's lows. The effect on CAD/JPY clear to see, as the cross tests new December highs and narrows the gap with the 100-dma of 107.96.
- This keeps the longer-term uptrend in CAD/JPY intact, as defined by the uptrendline drawn off the 2020 low at 73.82 (crosses at 105.58 today).
