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STIR: Bulk Of Hawkish Move In GBP STIRs Holds, Comes Alongside Swap Spd Widening

STIR
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GBP STIRs are off hawkish session extremes in the wake of dovish commentary from ECB President Lagarde, which seemed to open the door to an idea of an October rate cut.

  • Still, BoE-dated OIS is 0.5-7.5bp more hawkish through mid ’25 contracts when compared to Friday’s closing levels.
  • That leaves 24bp of cuts priced for November, 37bp of easing priced through year-end and 119bp of cuts seen through June ’25.
  • SONIA futures last -6.5 to +1.0.
  • Note the weakness also comes against swap spread widening, which some have attributed to quarter-end type payside flow. 2-Year spreads have led that widening.
  • BoE’s Greene will speak after the close, (21:10 today).
  • Further out, BoE chief economist Pill's address (Friday, Tuesday speech may have been cancelled) will be eyed for any dovish cues after other recent hawkish dissenters have appeared a little more open to further rate cuts.
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GBP STIRs are off hawkish session extremes in the wake of dovish commentary from ECB President Lagarde, which seemed to open the door to an idea of an October rate cut.

  • Still, BoE-dated OIS is 0.5-7.5bp more hawkish through mid ’25 contracts when compared to Friday’s closing levels.
  • That leaves 24bp of cuts priced for November, 37bp of easing priced through year-end and 119bp of cuts seen through June ’25.
  • SONIA futures last -6.5 to +1.0.
  • Note the weakness also comes against swap spread widening, which some have attributed to quarter-end type payside flow. 2-Year spreads have led that widening.
  • BoE’s Greene will speak after the close, (21:10 today).
  • Further out, BoE chief economist Pill's address (Friday, Tuesday speech may have been cancelled) will be eyed for any dovish cues after other recent hawkish dissenters have appeared a little more open to further rate cuts.