STIR: Less Than 50bp Of Cuts Priced Through Dec After CPI
Jul-16 06:42
Hawkish adjustments in GBP STIRs following the firmer-than-expected CPI data.
- BoE-dated OIS 1-4bp less dovish as a result.
- BoE-dated OIS now shows just under 50bp of cuts through year-end after pricing as much as ~58bp of easing over that horizon in the wake of BoE Governor Bailey’s dovish weekend comments and a soft REC labour market release.
- Market still shows over 80% odds of a cut at the August MPC and fully discounts such a move through the September meeting.
- SONIA futures 0.5-5.0 lower. SFIZ5 has pierced but not cleanly broken its pre-existing July low, while SFIZ6 failed to pierce its own month-to-date low.
- Nothing of any real note from BoE Governor Bailey and Chancellor Reeves (outside of already leaked details) in the Mansion House addresses last night, which will leave focus on adjustments to the CPI release and any spill over from U.S. PPI data.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Aug-25 | 4.013 | -20.5 |
Sep-25 | 3.960 | -25.8 |
Nov-25 | 3.806 | -41.1 |
Dec-25 | 3.723 | -49.4 |
Feb-26 | 3.595 | -62.2 |
Mar-26 | 3.561 | -65.6 |
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USD: Rate decisions are in Focus this Week
Jun-16 06:39
- Some Overnight Desks may have pointed out to some USD strength Overnight following the War in the Middles East, but we are not seeing that into the European session.
- The Dollar was printing some earlier lows against some Asian, EM Currencies, ZAR, ILS, TWD, CNY printed new intraday highs, but all in small.
- In G10s, the Dollar is mostly closer to flat, the SEK is down 0.23%, and on the Opposite side the AUD and NZD are the tiny ~0.10% best performers.
- Looking at the past Month, the Greenback is in deep red territory still with the Tariff Risks the main Global concern going forward.
- The closest Technical in G10 is in the USDCAD, with the Next support coming at 1.3575 Low Jun 13.
WTI TECHS: (N5) Impulsive Bull Wave
Jun-16 06:31
- RES 4: $84.23 - 3.000 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $81.93 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $80.00 - Psychological round number
- RES 1: $77.62 - High Jun 13
- PRICE: $73.52 @ 07:20 BST Jun 16
- SUP 1: $68.49 - Low Jun 13
- SUP 2: $63.62 - 50-day EMA
- SUP 3: $59.74 - Low May 30
- SUP 4: $54.33 - Low Apr 9 and a key support
WTI futures traded sharply higher last week and Friday’s early rally marked an acceleration of the current bull phase. Price action is likely to remain volatile and from a technical standpoint, the trend is currently in an extreme overbought position. A continuation higher would expose the $80.00 handle. A firm support is noted $68.49, the Jun 13 low. A breach of this level would signal scope for a deeper retracement.
BUNDS: Bonds are still trading on the heavier side
Jun-16 06:27
- Bund and Treasuries continue to trade on the heavy side, a little surprising given the escalation in Wars, although some may look at Inflation risks.
- Nonetheless, for now both contracts (RXU5 and TYU5) are trading flat going into the European session, and TYU5 is still just short of 110.14+, Friday's low.
- For the German Bund, support is still seen at 130.52, printed a 130.53 low last Week, and small resistance moves back down to the 131.00 figure.
- Italian Final CPI is the only release for Today, UK and Japan CPIs are the main release this Week, but CBs rate decision are at the forefront this Week.
- Global Investors will also be rolling their Equity Position into September, ahead of Triple Witching Friday.
- SPEAKERS: ECB Nagel (x2) Cipollone.
