STIR: No Dovish Impulse For EUR STIRs From French Data, Focus Turns To Germany
A modest downward surprise to French flash November inflation did not provide a meaningful impulse t...
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STIR: BOE-dated OIS Still Consistent Wtih 2x25bp Cuts Through April '26
Despite some light dovish repricing compared to yesterdays close, BOE-dated OIS remain consistent with about 2x25bp cuts through April 2026. Although recent UK data has driven a warranted repricing at the front of the BOE curve, it is still questionable how far below 3.50% some MPC members will want to take the terminal rate. More data will likely be required to catalyse a fresh material dovish move, while the signals from next week’s BOE decision will be key. Meanwhile, the upcoming Nov 26 budget remains a focus for all GBP market participants.
- The implied probability of a 25bp cut next week has risen to around 35%, up from about 5% at the start of this month. Last night Goldman Sachs, switched back to forecasting a November cut.
- The SONIA M6 contract hovers just below the 96.60 figure, which was tested last Friday.
- BOE lending data is due this morning, but isn’t usually a big market mover.
| Meeting Date | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Nov-25 | 3.889 | -8.0 |
| Dec-25 | 3.797 | -17.2 |
| Feb-26 | 3.645 | -32.4 |
| Mar-26 | 3.581 | -38.8 |
| Apr-26 | 3.468 | -50.1 |
| Jun-26 | 3.436 | -53.4 |
| Jul-26 | 3.375 | -59.4 |
| Sep-26 | 3.354 | -61.6 |
| Source: MNI/Bloomberg Finance L.P |
EURIBOR OPTIONS: Call Spread buyer
ERM6 98.25/98.37cs, bought for 2 in 5k.
EURGBP TECHS: Resumes Its Uptrend
- RES 4: 0.8865 1.764 proj of the Sep 15 - 25 - Oct 8 price swing
- RES 3: 0.8848 1.618 proj of the Sep 15 - 25 - Oct 8 price swing
- RES 2: 0.8835 High May 3 2023
- RES 1: 0.8803 1.236 proj of the Sep 15 - 25 - Oct 8 price swing
- PRICE: 0.8801 @ 08:29 GMT Oct 29
- SUP 1: 0.8751 High Sep 25
- SUP 2: 0.8710 20-day EMA
- SUP 3: 0.8688 50-day EMA
- SUP 4: 0.8656 Low Oct 8 and a key support
A bull trend in EURGBP remains intact. Tuesday’s strong gains resulted in a clear break of resistance 0.8769, the Jul 28 high and a bull trigger. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. The 0.8800 handle has been pierced, sights are on 0.8835, the May 3 2023 high. Initial support lies at 0.8751, the Sep 25 high.
