UK DATA: Consumer Credit Remains Subdued But Mortgage Approvals Firm
Nov-29 15:15
BOE Money and Credit October data shows continued growth in loan approvals as mortgage rates continue to fall in anticipation of further BOE rate cuts, though consumer credit remains subdued.
- Net consumer credit softened to GBP1.1bln, coming below expectations again (vs 1.3bln consensus, 1.2bln prior), driven by a fall in 'other forms of consumer credit' which includes car dealership finance and personal loans. This dampening in credit is likely due to the effective'' interest rate on new personal loans increasing 16bp to 8.85%.
- Net mortgage approvals rose to 109,800 - remaining the highest since October 2022, with approvals for house purchases rising to 68,300 (vs 64,500 consensus). This is likely in part due to the 'effective' interest rate on newly drawn mortgages decreasing 15bp to 4.61% in October - the lowest since May 2023.
- Money supply (M4 ex OFCs) growth meanwhile softened to 3.0% Y/Y, after seeing the highest annual reading since October 2022 with 3.5% in September.
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GILTS: 10s Threaten 4.40% As Sell Off Extends
Oct-30 15:11
Move in gilts extends further alongside the hawkish repricing in the GBP short end.
- Futures as low as 94.33. Previously identified Fibonacci support (94.61) breached, with the 1.618 projection of the same move (94.23) presenting the next technical point of interest on any fresh extension lower.
- Yields 7.5-11bp higher, front-end weakness more prominent in recent trade given the hawkish repricing.
- 2-Year yields hit the highest level since June, 10- to 30-Year yields register fresh ’24 highs, with 10s threatening a clean break above 4.40%.
BUNDS: German 10yr Yield could target next key resistance
Oct-30 14:59
- Bund has fully cleared the September high in Yield, EGBs are taking their cues from the Collapse in Gilt Futures, as MNI noted that the net effect of these tax and spend tweaks could support services inflation prices and thereby push up inflation forecasts over at least the next year or so - limiting the space with which the BoE could ease rates toward neutral next year.
- Next resistance in the 10yr Yield is at 2.40%, not only the next Psychological level, but also trendline and retracement level of the July/Sep fall.
- This level Equates to 131.76.
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GILTS: STIR: GILTS: Sharp Removal In Pricing Of BoE Rate Cuts In '25 On Budget Details
Oct-30 14:53
The immediate inflationary impact of today’s fiscal policy choices, coupled with long end weakness linked to the supply outlook, generates hawkish repricing in the GBP short end.
- BoE-dated OIS now prices 21bp of cuts for November, 31.5bp of cuts through year-end and 82bp of cuts through June.
- That compares to 23bp, 39.5bp and 105bp pre-Budget.
- SONIA futures now 0.5 to 16.5bp lower on the day, contracts as much as 26.0 ticks off intraday highs.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Nov-24 | 4.742 | -20.9 |
Dec-24 | 4.635 | -31.6 |
Feb-25 | 4.456 | -49.4 |
Mar-25 | 4.332 | -61.8 |
May-25 | 4.170 | -78.0 |
Jun-25 | 4.101 | -84.9 |
Aug-25 | 4.006 | -94.4 |
Sep-25 | 3.985 | -96.5 |
Nov-25 | 3.956 | -99.4 |
