STIR: Market Pricing Roughly 2/3 Odds Of A Dec BoE Cut
Liquid BoE-dated OIS (outside of the contract covering today’s meeting) are 1.5-3.5bp more dovish on the day.
- The initial hawkish reaction to the BoE leaving rates unchanged (owing to 5-6bp of easing being priced into the decision) was quickly reversed as BoE Governor Bailey’s personal comments, the broader statement on the MPC’s view on inflation & growth and tweaks to the guidance verse provided dovish readthrough, lowering the bar for easing to resume at the December MPC.
- 17bp of easing now priced for December, 27.5bp through February and 35bp through March.
- SONIA futures -3.0 to +4.5, twist flattening.
- October’s dovish extremes in SFIZ6, SFIZ5/Z6 spread and the GBP 1y1y remain untouched.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.802 | -16.7 |
Feb-26 | 3.694 | -27.5 |
Mar-26 | 3.615 | -35.4 |
Apr-26 | 3.513 | -45.6 |
Jun-26 | 3.473 | -49.6 |
Jul-26 | 3.410 | -55.9 |
Sep-26 | 3.371 | -59.8 |
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
FINLAND: Stubb & Orpo To Meet w/Trump 9 Oct To Press Ukraine Support
President Alexander Stubb has said that he intends to deliver messages from Ukraine to US President Donald Trump on Thursday, 9 October. Stubb has recently visited Kyiv for walks with his Ukrainian counterpart, Volodymyr Zelenskyy, and he will be in Washington, D.C., for talks at the White House alongside Prime Minister Petteri Orpo. The Finnish gov't says the meeting "will focus on bilateral relations between Finland and the United States, commercial and economic cooperation and Russia's war of aggression in Ukraine."
- Stubb has proved one of the European leaders most able to communicate effectively with President Trump during the latter's second term in office. Speaking in Kyiv, Stubb talked up one of Trump's recent European annoyances, namely the continued purchase of Russian hydrocarbons: "As far as getting our own house in order, I think President Trump, when he says that Europe needs to stop buying Russian oil and gas, is right.[...] the finger points in two places [referring to Hungary and Slovakia],"
- Helsingin Sanomat reports that the issue of US purchase of Finnish-made icebreaker vessels is also set to be on the agenda, although the gov't has not confirmed this. Orpo: "We have a lot to give. We have the ability to build icebreakers. We have that expertise. We are ready to discuss these issues.” Such an order would not only provide a notable boost to the shipyards in Helsinki and Rauma, but also bolster security ties between the US and Finland, seen as increasingly important now the country is in NATO and holds a border with Russia hundreds of miles long.
PIPELINE: Corporate Bond Update: $2.5B BoE, $1.75B CPPIB Debt Priced
- Date $MM Issuer (Priced *, Launch #)
- 10/07 $2.5B *Bank of England 5Y +8a
- 10/07 $1.75B *CPPIB 3Y SOFR+39
- 10/07 $Benchmark Angola +5Y 9.75%a, 10Y 10.5%a
- 10/07 $Benchmark Türkiye Garanti Bankası 10.5NC5.5
- 10/07 $Benchmark TD Synnex +3Y +100a, 10Y +145a
- 10/07 $Benchmark Goldman Sachs investor calls
- 10/07 $Benchmark JDC Dev Bank Kazakhstan +5Y, KZT 3Y investor calls
- Expected Wednesday
- 10/08 $Benchmark Federal Home Loan 2Y +4a
- 10/08 $1B Kommunalbanken Norway WNG 3Y SOFR+37
OPTIONS: Expiries for Oct08 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.1650(E698mln), $1.1700(E1.1bln), $1.1770-80(E1.2bln), $1.1800(E1.5bln), $1.1850-60(E1.0bln)
- USD/JPY: Y146.50($1.2bln), Y147.00($1.5bln), Y149.00($980mln), Y150.00($562mln), Y151.00($799mln)
