BOE: VIEW CHANGE: Morgan Stanley add two hikes to base case
* Morgan Stanley has updated its BOE base case this morning to add two 25bp hikes to 4.25% (Novemb...
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EGB OPTIONS: Large Schatz Call Spread
- DUV6 105.70/105.90cs, bought for 3 in 18k total.
Seems that the Schatz trade is Yesterday's trade, but Blocked Today.
STIR: Still Pricing A BoE Hike Through Year-End, Energy Remains Key
Little change in GBP STIRs vs. yesterday’s closing levels, with energy price swings dominating. The latest speculation surrounding work towards an Iran-Oman pact allowing passage through the Strait of Hormuz and a ceasefire deal between the U.S. & Iran are helping the space consolidate yesterday’s dovish move.
- SONIA futures flat to +2.0. SFIZ6 remains below 96.000. That level held on several tests earlier this month.
- BoE-dated OIS fully discounts a hike through year-end, with 4bp of tightening priced for next month and 15.5bp showing through November.
- Only lower tier domestic data is due today, with the U.S. PCE readings providing the major scheduled event risk.
- Ofgem revealed that the energy price cap will rise by 4% from October, more or less matching the closely watched estimate provided by Cornwall Insight. That won’t be a market mover.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Sep-26 | 3.772 | +4.1 |
Nov-26 | 3.886 | +15.5 |
Dec-26 | 3.989 | +25.8 |
Feb-27 | 4.085 | +35.4 |
Mar-27 | 4.161 | +43.0 |
Apr-27 | 4.217 | +48.6 |
Jun-27 | 4.256 | +52.5 |
EQUITY TECHS: E-MINI S&P: (U6) Testing Support
- RES 4: 7900.00 Round number resistance
- RES 3: 7892.00 1.500 proj of the Jun 11 - 15 - 26 price swing
- RES 2: 7849.93 1.382 proj of the Jun 11 - 15 - 26 price swing
- RES 1: 7770.50/7838.50 High Aug 18 / 13 and the bull trigger
- PRICE: 7683.25 @ 07:27 BST Aug 26
- SUP 1: 7655.00 Low Aug 24
- SUP 2: 7632.00 High Jul 16
- SUP 3: 7595.28 50-day EMA
- SUP 4: 7520.54 61.8% retracement of the Jul 29 - Aug 13 bull leg
S&P E-Minis are in consolidation mode. A bull cycle remains intact and the latest pullback is considered corrective. Price has breached the 20-day EMA, at 7683.77. This signals scope for a deeper near-term retracement towards the 50-day EMA at 7599.04. A clear break of the 50-day average is required to signal a stronger short-term bear threat. For bulls, a resumption of the uptrend would open 7849.93, a Fibonacci projection.
