POWER: Italy October Power to Open Higher
The Italian front-month power base-load contract is expected to edge up, once liquid, closely tracki...
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STIR: Light Hawkish Repricing In GBP STIRs Post Labour Market Data
Light hawkish repricing in GBP STIRs following this morning’s UK labour market data. We have argued that a continually softening labour market is a necessity for another quarterly cut in November. The reports released today did not present enough of a surprise to question the hawkish reaction to last week’s BOE decision, particularly with the unemployment rate holding steady and 3m/3m employment growth handily exceeding consensus forecasts (238k vs 185k cons, 134k prior).
- Still, there are signs that the labour market is continuing to ease. Pay growth and vacancies are falling, while most other employment metrics/surveys point to decelerating employment growth in contrast to the LFS series.
- SONIA dated OIS continue to assign virtually no implied probability of a cut in September, with 11bps of easing priced through November. The next full 25bp cut is not priced until February 2026 (27bps of easing priced).
- SONIA futures are flat to -2.5 ticks through the blues.
- GBP STIRs will be sensitive to this afternoon’s US CPI report.
| Meeting Date | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Sep-25 | 3.965 | -0.3 |
| Nov-25 | 3.856 | -11.2 |
| Dec-25 | 3.797 | -17.0 |
| Feb-26 | 3.697 | -27.0 |
| Apr-26 | 3.653 | -31.4 |
| Jun-26 | 3.573 | -39.5 |
| Jul-26 | 3.547 | -42.0 |
| Sep-26 | 3.505 | -46.2 |
| Source: MNI/Bloomberg Finance L.P |
USDCAD TECHS: Shallow Bounce Off Lows
- RES 4: 1.4111 High Apr 10
- RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.3920 High May 21
- RES 1: 1.3879 High Aug 1
- PRICE: 1.3779 @ 08:15 BST Aug 12
- SUP 1: 1.3557 Low Jul 03
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
USDCAD remains subdued, despite the shallow bounce Friday feeding through to further gains on Monday. This follows the weaker-than-expected jobs data last week. The pair remains notably lower on the week on the back of last Friday’s USD weakness. Initial firm support has been breached at the 1.3737 20-day EMA, a break below which would resume the correction off the early August high at 1.3879. On the recent run higher, price traded through the 50-day EMA at 1.3744, which aided the rally. This week’s price action, however, has cancelled that bullish threat and returned focus lower. The 100-dma becomes a key pivot point at 1.3824 last.
AUDUSD TECHS: Consolidation Mode
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing
- RES 1: 0.6541/6625 High Aug 7 / 24 and the bull trigger
- PRICE: 0.6503 @ 08:14 BST Aug 12
- SUP 1: 0.6419 Low Aug 1
- SUP 2: 0.6373 Low Jun 23 and a bear trigger
- SUP 3: 0.6354 38.2% retracement of the Apr 9 - Jul 24 upleg
- SUP 4: 0.6323 Low Apr 16
AUDUSD rallied well off the week’s lowest levels last week on broad USD weakness - erasing any signs of a bearish breakout on the show through the 20- and 50-day EMAs. While support at 0.6455 the Jul 17 low, has been cleared, the recovery in prices keeps key resistance in focus at 0.6625 the Jul 24 high. It also represents the bull trigger. Any return lower would signal a bearish threat into 0.6373, the Jun 23 low.
