STIR: Just Over 35bp Of BoE Cuts Priced Through Dec
GBP STIR pricing sits roughly around levels seen late yesterday, with Bunds and Tsys further away from Asia-Pac session lows as weakness in crude oil futures provides some support for core global FI.
- BoE-dated OIS is essentially unchanged, showing 0bp of movement for next month, 12bp of easing through August, 17.5bp of cuts through September, 30bp through November and 37bp through December.
- SONIA futures +1.0 to -1.5 comfortably off yesterday’s lows.
- Flash PMI data and comments from BoE’s Pill, Breeden & Dhingra are due today.
- A combination of the topics that are being covered in those addresses and the fact that we have recently heard from these speakers means that the BoE rhetoric shouldn’t be too market moving.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Jun-25 | 4.212 | +0.1 |
Aug-25 | 4.094 | -11.7 |
Sep-25 | 4.033 | -17.7 |
Nov-25 | 3.905 | -30.6 |
Dec-25 | 3.836 | -37.5 |
Feb-26 | 3.748 | -46.3 |
Mar-26 | 3.736 | -47.5 |
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STIR: Nearly 90bp Of BoE Cuts Priced through Year-End
Twist steepening seen in SONIA futures after the long weekend, taking account of the moves in Tsys.
- The moves seem to be driven by ongoing U.S. policy uncertainty (tariff wars and President Trump’s continued critique of Fed Chair Powell), reflecting heightened near-term risks to growth, with the risk of stickier inflation further out.
- Contracts +3.5 to -4.5.
- BoE-dated OIS little changed to 2bp more dovish across ’25 meetings, showing 25.5bp of cuts for May, 37bp through June, 57bp through August and 88bp through year-end.
- Little of note on the UK calendar for today, which will leave post-holiday adjustments and macro cues at the fore.
- Brightmine pay data is due around midnight, with flash PMIs and BoE-speak from Bailey, Pill & Breeden scheduled for Wednesday.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
May-25 | 4.203 | -25.6 |
Jun-25 | 4.087 | -37.1 |
Aug-25 | 3.888 | -57.1 |
Sep-25 | 3.772 | -68.6 |
Nov-25 | 3.626 | -83.3 |
Dec-25 | 3.576 | -88.3 |
USD: Paring some losses into the EU Session
- The Dollar is in the red across all G10s, albeit off its worst levels going into the European session.
- As previously noted the Yen rallied to its best level since September, as the USDJPY fell below the 140.00 figure, printing a 139.89 low for the early session.
- The cross seems to be finding some support as Europe comes in, some suggestion of potential Option barrier might be helping, but looking at Option expiries, the only notable size is on Thursday with 1.61bn worth of expiry at 140.00.
- The Dollar is now seeing a small bid against the EUR, CHF, GBP, CAD, AUD, NZD, SEK and NOK, albeit all within the Overnight ranges.
EURJPY TECHS: Trend Signals Remain Bullish
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 163.55/164.19 High Apr 14 / High Mar 18 and the bull trigger
- PRICE: 161.55 @ 07:32 GMT Apr 22
- SUP 1: 161.18/158.30 50-day EMA / Low Apr 7 and key support
- SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle
- SUP 3: 155.60 Low Low Mar 4
- SUP 4: 154.80 Low Low Feb 28
The recent pullback in EURJPY appears corrective - for now - and trend conditions remain bullish. Key short-term support has been defined at 158.30, the low on Apr 7. A break of this level is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. For bulls, a resumption of gains would expose 164.19, the Mar 18 high and the bull trigger. Clearance of this hurdle would resume the uptrend.
