OUTLOOK: Price Signal Summary - Gilts Bull Cycle Intact
Sep-18 10:33
- In the FI space, Bund futures remain below their latest highs. Recent gains resulted in a break of resistance at 128.87, the Aug 28 high and a short-term bull trigger. The climb undermines a recent bearish theme and highlights a stronger reversal. Scope is seen for an extension towards 129.50, the Aug 5 high. Key support and the bear trigger has been defined at 127.61, the Sep 3 low. The pullback from the Sep 9 high is - for now - considered corrective.
- A bull cycle in Gilt futures remains intact and the contract is trading closer to its latest highs. A recent rally highlights a stronger corrective cycle. Note that the move higher has allowed an oversold trend condition to unwind. Price has breached initial firm resistance at 90.84, the Aug 28 and 29 high. A continuation higher would open 92.06, the Aug 14 high. On the downside, initial support lies at 90.65, the Sep 5 low.
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OPTIONS: Expiries for Aug19 NY cut 1000ET (Source DTCC)
Aug-19 10:32
- EUR/USD: $1.1600(E731mln), $1.1620-25(E2.3bln), $1.1650-65(E682mln), $1.1700(E1.3bln)
- USD/JPY: Y148.30-35($709mln)
- AUD/USD: $0.6515(A$745mln)
- USD/CAD: C$1.3750-70($646mln)
STIR: Sept Fed Cut Still No Longer Fully Locked In, A Dovish Bowman Ahead
Aug-19 10:32
- Fed Funds implied rates are unchanged on the day, with 21bp of cuts priced for next month’s FOMC meeting.
- Cumulative cuts from 4.33% effective: 21bp Sep, 34.5bp Oct, 53.5bp Dec, 64bp Jan and 77bp Mar.
- The SOFR implied terminal yield of 3.11% (SFRH7) is essentially unchanged from the past two closes, holding the +/-5bp of 125bp of cuts from current levels range seen since the Aug 1 payrolls report.
- Fed VC Supervision Bowman (permanent voter, dove) speaks on Bloomberg TV at 1000ET before at a Blockchain Symposium at 1410ET (text only), with greater scope for market moving comments at the former. We suspect it might be hard to generate a dovish reaction though unless she canvasses larger cuts, something other FOMC colleagues have pushed back on.
- These will be her first remarks since last week’s mixed inflation data. She said on Aug 9 that she favors three cuts this year (unsurprising having dissented in July) and saw recent labor data as reinforcing this view.
- Tomorrow then sees the FOMC minutes before Powell’s Jackson Hole address on Friday. However, when it comes to Sept cut prospects, the August payrolls and CPI releases plus QCEW details (for preliminary payroll benchmark revision estimates) are all still to come before the next FOMC decision on Sep 17.
ESM ISSUANCE: 6-month ESM-Bill
Aug-19 10:32
| Type | 6-month bills |
| Maturity | Feb 19, 2026 |
| Amount | E1.082bln |
| Target | E1.1bln |
| Previous | E1.089bln |
| Avg yield | 1.947% |
| Previous | 1.923% |
| Bid-to-cover | 2.64x |
| Previous | 2.41x |
| Previous date | Jul 15, 2025 |
