MNI BRIEF: Macron Stresses EU Unity Need Post US Vote

MNI China Daily Summary: Wednesday, Nov 6

MNI: UK OCT CONSTRUCTION PMI 54.3 (FCST 55.1); SEP 57.2

MNI BRIEF: mBridge Project To Move Forward Despite BIS Exit

MNI BRIEF:China's Nov Retail Prosperity Index Remains Above 50

MNI: PBOC Net Drains CNY413.7 Bln via OMO Wednesday

MNI: US MBA: MARKET COMPOSITE -10.8% SA THRU NOV 01 WK

US MBA: REFIS -19% SA; PURCH INDEX -5% SA THRU NOV 1 WK

MNI: EUROZONE SEP PPI -0.6% M/M, -3.4% Y/Y

EUROPEAN FISCAL: DE 2025 Budget Gap Grows; Political Risk Is Rising

CANADA: Politics Week: Trudeau Facing More Internal Dissent And Departures

CANADA: Politics Week: Trudeau Faces More Pressure To Resign

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

STIR: Significant SOFR Underperformance Remains Despite Shift Off Lows

STIR
BulletMarketsFixed Income BulletsForeign Exchange Bullets
  • SOFR futures hold an overnight shift off lows but still see implied yields up to 10bps higher on the day through the greens and larger increases beyond following further networks calling the election in Trump’s favor.  
  • The day’s sell-off is exaggerated by yesterday’s second half rally, which at the time reversed much of the hawkish implications from a strong ISM services report.
  • However, even taking that into account and looking at changes since around the European close, SOFR futures still heavily underperform with yields some 4bps higher – see chart.
  • Euribor sees the largest rally, with 2H25 implied yields 16bps lower on the aforementioned tariffs threat.
  • The rally in UK rates is more restrained, with yields as much as 7bps lower through late 2025/early2026 contracts. There’s a clear reluctance to move too far away from yesterday’s fresh cycle highs for terminal rate expectations at just under 4% for almost 20bps above pre-Budget levels (in firm contrast to Euribor implied terminal rates back below 2%). 

  • There could be some stickiness here before the BoE decision on Thursday (MNI Preview here). 

178 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.
  • SOFR futures hold an overnight shift off lows but still see implied yields up to 10bps higher on the day through the greens and larger increases beyond following further networks calling the election in Trump’s favor.  
  • The day’s sell-off is exaggerated by yesterday’s second half rally, which at the time reversed much of the hawkish implications from a strong ISM services report.
  • However, even taking that into account and looking at changes since around the European close, SOFR futures still heavily underperform with yields some 4bps higher – see chart.
  • Euribor sees the largest rally, with 2H25 implied yields 16bps lower on the aforementioned tariffs threat.
  • The rally in UK rates is more restrained, with yields as much as 7bps lower through late 2025/early2026 contracts. There’s a clear reluctance to move too far away from yesterday’s fresh cycle highs for terminal rate expectations at just under 4% for almost 20bps above pre-Budget levels (in firm contrast to Euribor implied terminal rates back below 2%). 

  • There could be some stickiness here before the BoE decision on Thursday (MNI Preview here).