RIKSBANK: Small Correction On Earlier Press Conference Post
Just a quick correction for anyone looking back at the Riksbank press conference comments. In the fo...
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GILTS: Early Demand Stalls As Risk Sentiment Stabilises
Gilts initially drew support from a move lower in global equity markets, before stabilsation in wider risk sentiment and an uptick from session lows in crude oil limited demand.
- Gilt futures trade +8 at 92.47 vs. highs of 92.60.
- Initial support and resistance located at 91.94 & 92.85. Our technical analyst still deems the recent weakness to be corrective at this stage.
- Yields ~0.5bp lower across the curve.
- 2s10s and 5s30s got within 1bp of October closing highs.
- Gilt/Bunds 1.5bp wider at 183.5bp after failing to push above 185bp in recent sessions, still holding most of the recent recovery from sub-175bp.
- The GBP.125bln tender of the 4.75% Dec-30 line passed smoothly.
- BoE-dated OIS pricing 18.5bp of easing for December (~75% odds of a cut).
- SONIA futures little changed to +2.0, with SONIA-implied BoE terminal rate pricing little changed on the day, at 3.39%.
- Comments from BoE’s Pill (voted to leave rates unchanged earlier this month) & Dhingra (the most dovish MPC member) are due today.
- A reminder that we do not expect much market vol. to stem from any non-Bailey BoE comments in the lead up to the December decision, given the entrenched views of the other MPC members (Bailey is deemed the key swing voter).
- Immediate focus remains on tomorrow’s inflation data (click for our full preview) and next week’s Budget.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.785 | -18.4 |
Feb-26 | 3.697 | -27.3 |
Mar-26 | 3.619 | -35.0 |
Apr-26 | 3.519 | -45.0 |
Jun-26 | 3.476 | -49.3 |
Jul-26 | 3.427 | -54.2 |
Sep-26 | 3.404 | -56.5 |
EURIBOR OPTIONS: Put vs Call Spread
ERH6P 97.9375p vs ERZ6C 98.1875/98.375cs, bought the cs for 1.75 in 6k.
EGBS: German 5s30s Meets Resistance Again; 2026 Issuance Details Needed
The German 5s30 curve has once again met resistance around 103.7bps, a level which has contained upside on several occasions since mid-September. Although the 2026 German budget (passed last week) contained higher net debt than initial drafts, markets are still awaiting details on how the expected issuance ramp-up will be distributed across the curve. As such, details of DFA’s 2026 issuance plan (usually presented in mid-December) may be necessary before 5s30s can make a fresh challenge of year-to-date highs of 111bps.
- Renewed interest in long-end swap spread/ASW wideners on Dutch pension fund dynamics may have also played a role (even with spreads a touch off recent highs at typing). The EUR 5s30s swap curve (vs 3m Euribor) is currently at a fresh multi-year high of 70.5bps.
- Intraday, the curve is bull steeper, with 5-year yields down 2.5bps and 30-year yields little changed.
- Bund futures are +17 ticks at 128.82, seemingly finding support from a continued pullback in European equities (though we caveat that these correlations have not been too reliable in recent sessions). Initial resistance in Bunds is seen at the 50-day EMA of 129.10.
- 10-year EGB spreads to Bunds are up to 1.5bps wider. The OAT/Bund spread is back at 75bps, with political developments still in focus.
- The EU is holding a syndicated tap (E5bln WNG) of the 2.50% Oct-30 EU-bond today. Meanwhile, Slovakia sold SlovGBs and Finland will sell RFGBs at 1100GMT.
- There is no regional data scheduled today, while the only remaining ECBspeak comes from Bank of Slovenia’s Dolenc.
Figure 1: German 5s30s Curve
