GILTS: Opening calls

Gilt calls, 92.99/93.09 range.

EU Cash Opening calls, early focus will be on the Banking sector.

• Calls: Estox 50: +0.39%, Dax: +0.73%, CAC: -0.00%, FTSE +0.38%, SMI +0.31%.

Modest dovish moves in GBP STIRs with Bunds away from yesterday’s lows and oil continuing to tick lower.

• BoE-dated OIS little changed to 1bp more dovish across contracts covering ’25 meetings.
• ~90bp of cuts still priced through year-end, a little less dovish than April’s extreme of ~97bp.
• The next 25bp cut is still fully discounted come the end of the May MPC.
• SONIA futures flat to +2.0 contracts remain below April highs.
• We went through potential tweaks to the BoE’s guidance in our latest Gilt Week Ahead.
• If the MPC wants to potentially open the door to a change in the guidance it could remove the word “gradual” but temper the adjustment by keeping “restrictive” and “careful”. This effectively would signal to the market that there was a possibility that the BoE may accelerate rate cuts as far as neutral, which would at least open up the potential for back-to-back cuts between May and August (59bp of cuts currently priced across those 3 meetings).
• BoE’s Ramsden will speak at 10:40 BST, although he seems unlikely to comment on monetary policy matters as he will give the keynote speech on payments innovation at the Innovate Finance Global Summit.
• That should leave macro cues at the fore, with continued focus on tariffs and the global trade backdrop.