SONIA: SFIZ6 & Z7 Threaten Breaks Below Medium-Term Uptrend Support

• -21,000 FFF6 96.295, post time bid at 0951:22ET.
• The Jan'26 serial contract trades 96.295 last (-0.010)

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• Labour market data has risen in prominence again with the main focus on private regular earnings (AWE).
• We see risks tilted slightly to the upside – which might see a larger-than-usual initial market reaction if we round up to 4.3%Y/Y (given the emphasis Governor Bailey is placing on the data ahead of the December MPC meeting and that markets already price in 17bp of cuts for this meeting).
• We look at the updated BOE staff projections as well as median expectations.
• The unemployment projection for Q3 is expected at 4.87% in the new MPR projections with 11/12 sellside previews we have read also looking for a number that rounds to 4.9%.
• The main bright spot in last month’s report was the payrolls revisions which have left the series looking as though it has stabilised rather than fallen over the past 3-months. We haven’t seen much discussion on whether there will be further revisions here but the median of the previews that we have read looks for a flat flash October print (while the Bloomberg consensus looks for -3k).

• Overall - that is the most explicit Reeves has been about breaking the manifesto pledges not to increase income tax, NIC or VAT (but one of those being broken is already widely expected now).
• Also the clearest indication regarding the end of the 2 child benefit cap: "I don't think a child said the chancellor should be penalised for being in a bigger family through no fault of their own."