STIR: Less Than 10bp Of BoE Cuts Priced Through Dec
A pretty flat open for GBP STIRs, which consolidate recent hawkish moves to fresh multi-month extremes in the light of domestic data developments and the BoE’s hawkish rate cut earlier this month.
- SONIA futures essentially flat, while BoE-dated OIS prices ~9bp of easing through year-end, with the next cut not fully discounted until the end of the April MPC decision.
- A fresh move lower in SFIZ6 would target the June low (96.330).
- SFIZ5/Z6 has rebounded from fresh cycle lows of -32.0, to last trade at -24.0.
- A reminder that MPC member Mann spoke on Tuesday afternoon. She noted that "persistent inflation persistence is my central case." She argued against near-term rate cuts due to inflation persistence and provided further colour on her "activist stance" towards policy.
- Only lower tier CBI distributive trade data is scheduled on the UK macro calendar today.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Sep-25 | 3.976 | +0.9 |
Nov-25 | 3.922 | -4.5 |
Dec-25 | 3.877 | -9.0 |
Feb-26 | 3.784 | -18.3 |
Mar-26 | 3.750 | -21.6 |
Apr-26 | 3.689 | -27.8 |
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OIL: Firmer Following U.S.-EU Deal
Brent & WTI add over $0.60 this morning but remain within Friday’s respective ranges.
- Our commodities team notes that crude is supported by the U.S.-EU trade deal, which helps alleviate concerns that increased protectionism would weigh on global energy demand. Oil market focus is now on the outcome of U.S.-China talks starting today and Sunday’s OPEC meeting.
EQUITY TECHS: E-MINI S&P: (U5) Starting The Week On A Bullish Note
- RES 4: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing
- RES 3: 6500.00 Round number resistance
- RES 2: 6477.31 1.618 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6457.75 Intraday high
- PRICE: 6456.75 @ 07:26 BST Jul 28
- SUP 1: 6391.50/6302.01 Low Jul 24 / 20-day EMA
- SUP 2: 6241.00 Low Jul 16
- SUP 3: 6153.14 50-day EMA
- SUP 4: 6130.75 Low Jun 25
S&P E-Minis have traded to fresh cycle high today as the contract begins the week on a bullish note. The climb confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Note that moving average studies are in a bull-mode position highlighting a clear dominant uptrend. Sights are on 6477.31, a Fibonacci projection. Key support is at the 50-day EMA, at 6153.14. Support at the 20-day EMA is at 6302.01.
BUNDS: Looking to close the Gap
- A light early flow, but Bund look to close the Opening gap up to 129.50.
- The contract remains unaffected from the Risk On Tone, and aside from the Data and the FOMC this Week, Month End will also be watched.
- While risk is still tilted to the downside for Bund Futures, August is seasonally a Bullish Month.
