GBPUSD TECHS: Sell-Off Exposes Key Support

Jul-25 13:56

* RES 4: 1.3789 High Jul 01 and the bull trigger * RES 3: 1.3689 76.4% retracement of the Jul 1 - 16...

Historical bullets

EQUITIES: Nasdaq breaks a new all time record high on the Open

Jun-25 13:49
  • Nasdaq (NDX) breaks higher on the Open to reach a new all time record high on the Cash Open, this level was at 22,222.61, and the Index has printed a 22,329.68 high.
  • Cash SPX has also gapped higher, but the index is still short of the record high situated at 6,147.43.

SONIA: Medium-Term Dovish Catalyst Likely Needed To Push SFIZ5/Z6 Notably Lower

Jun-25 13:37

The SFIZ5/Z6 spread hovers above year-to-date lows (-21.0 vs. -23.0).

  • It seems that the market needs a fresh medium-term dovish catalyst to drive the spread significantly lower.
  • The BoE’s current guidance continues to point towards quarterly rate cuts through year-end.
  • Our baseline view looks for cuts at both the August and November meetings.
  • What could push the SFIZ5/Z6 spread lower?
  • While the 6-3 vote split at the most recent MPC decision was dovish when compared to the 7-2 market baseline heading in, Deputy Governor Ramsden’s choice to join the dovish camp was within the list of viable outcomes.
  • The market needs to see more before committing to pricing deeper easing.
  • The most obvious driver would be a continued deterioration in the labour market, resulting in lower wage growth.
  • This could then feed into a more benign inflation backdrop than the BoE currently expects.
  • However, there are some risks to this idea, even if the data evolves in that manner.
  • A rapid deterioration in the labour market could result in frontloading of rate cuts, making for limited or even hawkish impact on this spread if the cutting cycle comes to an end before the turn of the year (the MaPS survey points to a 3.50% neutral rate vs. the prevailing 4.25%).
  • What’s more, geopolitical risks and U.S. tariff policy present notable medium-term externalities at present, providing a limitation when it comes to pricing a deeper cutting cycle in ’26.
  • These factors also feed into the broader sense of macro uncertainty, making it hard to form a view beyond the next few months.

EQUITIES: US Cash Opening calls

Jun-25 13:26
  • SPX: 6,111.8 (+0.3%).
  • DJIA: 43,130 (+0.1%/+41pts).
  • NDX: 22,316.5 (+0.6%).