STIR: Over 80% Odds Of Dec BoE Cut Still Priced, Greene Remains Hawkish
Modest dovish moves in GBP STIRs on spillover from the softer-than-expected Franch inflation data.
- BoE-dated OIS essentially flat, showing 22bp of easing for December, 29bp through February, 38bp through March and 48bp through April.
- SONIA futures flat to +2.0. Implied terminal rate pricing steady around 3.35%.
- BoE MPC member Greene reaffirmed her worries surrounding second-round inflation late on Thursday, despite noting that evidence surrounding slowing wage growth is encouraging. She also noted that there are some green shoots emerging in the labour market, while playing down the idea that cuts in energy bills will have a meaningful impact on inflation over the medium-term.
- All in all, she didn’t depart from her hawkish stance and we expect her to vote for no change in rates in December,
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.748 | -22.1 |
Feb-26 | 3.680 | -28.9 |
Mar-26 | 3.593 | -37.6 |
Apr-26 | 3.492 | -47.7 |
Jun-26 | 3.444 | -52.5 |
Jul-26 | 3.383 | -58.6 |
Sep-26 | 3.363 | -60.6 |
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AUD: Large FX Exchange traded Option post CPI
In Case missed Overnight via CME traded Option and following the Australian CPI coming above expectations. This trade does cover the November RBA meeting but not the December one
- AUDUSD (5th Dec) 67.5c, bought for 0.18 and 0.20 in ~5.3k.
This Option is now 0.20/0.22 and the underlying is close to the spot at 66.185.
NORWAY: Retail Sales Momentum Softening, But Won't Concern Norges Yet
- Norwegian retail sales momentum is softening, but remains positive. Norges Bank will likely retain its cautious guidance at next week’s decision (alongside holding the deposit rate at 4.00%), but risks over the next 12 months appear tilted in favour of more easing than implied by the September MPR rate path.
- SA retail sales (ex autos) fell 0.5% M/M in September, weaker than the three analyst estimates ranging between -0.3% and 0.1%. August’s reading was also revised down a tenth to 0.1%. 3M/3M momentum nonetheless remains positive at 0.7% (vs 0.8% prior).
- Sales excluding autos and fuel fell 0.2% M/M (vs +0.3% prior), with 3M/3M momentum easing to 0.7% (vs 1.0% prior) and a YTD high of 1.7%.
- We were expecting to receive monthly data on household goods consumption this morning (which would have provided signals for next month’s Q3 GDP report), but Statistics Norway has said that the data has been “postponed indefinitely”
EQUITY TECHS: E-MINI S&P: (Z5) Bull Cycle Extends
- RES 4: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 3: 6974.04 3.382 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 2: 6953.25 2.000 proj of the Aug 1 - 15 - 20 price swing
- RES 1: 6944.75 High Oct 28
- PRICE: 6941.25 @ 07:25 GMT Oct 29
- SUP 1: 6812.25/6765.36 High Oct 9 / 20-day EMA
- SUP 2: 6666.16 50-day EMA
- SUP 3: 6540.25 Low Oct 10 and a key short-term support
- SUP 4: 6506.50 Low Sep 5
The trend condition in S&P E-Minis remains bullish and price has traded higher this week. The fresh cycle high confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. The 6900.00 handle has been cleared, opening 6953.25 next, a Fibonacci projection. Initial firm support to watch lies at 6748.48, the 20-day EMA.
