SILVER TECHS: Recovers Off Support
* RES 4: $41.064 - 1.764 proj of the Apr 7 - 25 - May 15 swing * RES 3: $40.285 - 1.618 proj of the ...
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STIR: Just Under 55bp Of BoE Cuts Priced Through Dec, Following Global Cues
Modest hawkish adjustments in GBP STIRs at the open, with feedthrough from wider core global FI as Europe avoided deeper U.S. tariffs (at least at this stage) and with the RBA providing a surprise on hold decision overnight (expectations were for a cut).
- SONIA futures flat to -2.0, early July highs in both SFIZ5 & Z6 remain untested.
- BoE-dated OIS remains in multi-week ranges, liquid contracts little changed to 1bp less dovish.
- 21bp cuts priced through August, 28bp through September, 44bp through November and 53bp through year-end.
- We continue to look for cuts in August and November at this stage, with risks skewed dovishly.
- Further softening in the labour market presents the most likely dovish catalyst, with fresh developments on that front likely needed to promote the pricing of a more aggressive easing cycle through year-end.
- Elsewhere, focus remains on the fragile fiscal situation with last week’s events underscoring the difficulty of enacting meaningful public spending cuts and increasing the odds of tax hikes in the Autumn (a negative for GDP growth).
- Nothing of any real note on Tuesday’s UK calendar, with long end I/L gilt supply the only event worth flagging.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Aug-25 | 4.006 | -21.2 |
Sep-25 | 3.941 | -27.7 |
Nov-25 | 3.781 | -43.6 |
Dec-25 | 3.691 | -52.7 |
Feb-26 | 3.558 | -65.9 |
Mar-26 | 3.526 | -69.1 |
BONDS: Japanese Investors Were Large Buyers Of USTs In May
Japanese investors purchased JPY2.87trln of US Treasuries in May, the largest monthly inflow since August 2024. Prior to May, YTD Japanese net flows into USTs had totalled just JPY699trln.
- 10-year Treasury yields rose ~24bps through May, comprising a 44bp rise between April 30 and May 21, and a 20bp fall into month-end. The sharp rise in yields came amid fiscal concerns surrounding the One Big Beautiful Bill Act (which was signed into law last week), alongside details of the US trade agreement with China on May 12.
- The monthly BOP data doesn’t give details of intramonth flows, but weekly portfolio investment data from the MOF highlights a sharp rise in Japanese buying of foreign bonds in the week to May 16 (JPY2.83trln).
- There weren't huge net flows to note in the EGB/Gilt space. Japanese investors:
- Net sold JPY33bln of German bonds, after net selling of JPY1.48trln in April.
- Net purchased JPY188bln of French bonds, bringing YTD net inflows to JPY492bln.
- Net purchased JPY112bln of Italian bonds, after net selling of JPY201bln in April.
- Net purchased JPY7.2bln in UK bonds, after net purchases of JPY180bln in April.
- Australian bonds also saw net inflows of JPY214bln, the largest since April 2023.
EQUITY TECHS: E-MINI S&P: (U5) Bulls Remain In The Driver’s Seat
- RES 4: 6402.44 1.382 proj of the May 23 - Jun 11 - 23 price swing
- RES 3: 6381.00 1.764 proj of the Apr 7 - 10 - 21 price swing
- RES 2: 6356.12 1.236 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6333.25 High Jul 3
- PRICE: 6282.25 @ 07:24 BST Jul 8
- SUP 1: 6235.50 Low Jul 2
- SUP 2: 6151.56/6011.49 20- and 50-day EMA values
- SUP 3: 5811.50 Low May 23
- SUP 4: 5645.75 Low May 7
The trend condition in S&P E-Minis is unchanged, the outlook remains bullish. Resistance at 6128.75, the Jun 11 high, has recently been breached. The break confirmed a resumption of the uptrend that started Apr 7. This has been followed by a breach of key resistance and a bull trigger at 6277.50, the Feb 21 high. Sights are on 6356.12, a Fibonacci projection. Key support is at the 50-day EMA, at 6011.49.
