MNI BRIEF: Japan Oct Sentiment, Outlook Indexes Both Fall

MNI: PBOC Net Injects CNY116.4 Bln via OMO Monday

MNI: China CFETS Yuan Index Down 0.21% In Week of Nov 8

CHINA YTD NEW LOANS CNY16.52 TRLN VS MEDIAN CNY16.7 TRLN: PBOC

MNI BRIEF: PBOC Has Room For More Easing : Research Head

MNI: PBOC Sets Yuan Parity Higher At 7.1786 Mon; +1.55% Y/Y

MNI: NORWAY OCT CORE CPI +0.2% M/M, +2.7% Y/Y

MNI: NORWAY OCT CPI +0.6% M/M, +2.6% Y/Y

MNI BRIEF: China Oct CPI Slows For 2nd Month To 0.3% Y/Y

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

STIR: Budget To Dominate GBP STIRs Today, 37.5bp Of BoE Cuts Priced Through Dec

STIR
BulletMarketsFixed Income BulletsForeign Exchange Bullets

Modest dovish moves in GBP STIRs, with Bunds and Tsys trading comfortably higher than levels seen at yesterday’s SONIA settlement. 

  • BoE-dated OIS little changed on the day, showing ~22.5bp of cuts for November, ~37.5bp of cuts through year-end and 101.5bp of easing through June.
  • SONIA futures flat to +1.5. Contracts beyond SFIH6 have breached their previous October lows in recent days, with increased gilt issuance risk surrounding the Budget driving hawkish repricing.
  • The delivery of the Budget (12:30 London) means that long end moves should continue to shape the GBP short end today.
  • Still, our expectation is that the Budget’s impact on BoE policy will ultimately be more subdued than the market currently fears, as we expect infrastructure spending to be increased in a fairly gradual manner.
  • If you make the argument that the Budget may only slow the pace of cuts when the neutral Bank rate is approaching, and also believe that the MPC won’t entertain 50bp cuts, then we can get to the May-August ‘25 MPC meetings before the Budget may start to factor more prominently into MPC decision making (using the September BoE MAPs estimate of neutral, ~3.50%, as a baseline).
  • That assumes that the economic data has been weak enough to generate sequential cuts up until that point.
  • Market pricing is less aggressive than that scenario at present.

BoE Meeting

Keep reading...Show less
226 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Modest dovish moves in GBP STIRs, with Bunds and Tsys trading comfortably higher than levels seen at yesterday’s SONIA settlement. 

  • BoE-dated OIS little changed on the day, showing ~22.5bp of cuts for November, ~37.5bp of cuts through year-end and 101.5bp of easing through June.
  • SONIA futures flat to +1.5. Contracts beyond SFIH6 have breached their previous October lows in recent days, with increased gilt issuance risk surrounding the Budget driving hawkish repricing.
  • The delivery of the Budget (12:30 London) means that long end moves should continue to shape the GBP short end today.
  • Still, our expectation is that the Budget’s impact on BoE policy will ultimately be more subdued than the market currently fears, as we expect infrastructure spending to be increased in a fairly gradual manner.
  • If you make the argument that the Budget may only slow the pace of cuts when the neutral Bank rate is approaching, and also believe that the MPC won’t entertain 50bp cuts, then we can get to the May-August ‘25 MPC meetings before the Budget may start to factor more prominently into MPC decision making (using the September BoE MAPs estimate of neutral, ~3.50%, as a baseline).
  • That assumes that the economic data has been weak enough to generate sequential cuts up until that point.
  • Market pricing is less aggressive than that scenario at present.

BoE Meeting

Keep reading...Show less