STIR: BoE-Dated OIS Still Pricing Over 55bp Of Cuts Through Dec, Ramsden Due Fri
Feb-27 15:48
Little net movement in GBP STIRs today, with BoE-dated OIS continuing to price a little over 55bp of cuts through year-end.
- Focus moves to BoE Deputy Governor Ramsden’s early Friday comments (07:00 GMT).
- We have suggested that this may provide the most interesting domestic development of the week.
- A reminder that Ramsden voted in favour of the enacted cuts in August, November and February. He also dissented in favour of a sequential 25bp cut in December and favoured an earlier first cut (first voting for 25bp cuts in May and June).
- His previous speeches have been quite focused on how wage growth impacts services inflation but we haven't heard directly from him since the BoE Agents' Pay Survey pointed to 3.7% pay growth in 2025 (the last time he spoke the early indications of the survey were pointing to 2-4% before being narrowed to 3-4% in December).
- It would be a surprise if he did not vote for sequential cuts in the near-term, after voting for a December cut.
- We will be watching his Friday speech for any change in tone, as well as any indication on where he estimates the neutral rate to be.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.447 | -0.8 |
May-25 | 4.253 | -20.1 |
Jun-25 | 4.190 | -26.5 |
Aug-25 | 4.054 | -40.1 |
Sep-25 | 4.008 | -44.7 |
Nov-25 | 3.921 | -53.4 |
Dec-25 | 3.895 | -56.0 |
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US DATA: Regional Fed Mfg Surveys Point To Sizeable ISM Mfg Upside Risk
Jan-28 15:37
- The Richmond Fed manufacturing survey rounded out the five regional Fed reports for January, with the five on balance seeing a sequential improvement.
- The Richmond mfg index beat expectations as it increased to -4 in Jan (cons -10) from -10 in Dec for a further improvement away from the low of -21 in September. It’s now the least negative since May.
- New orders painted a broadly similar story, at -4 after -11 although that was its least negative since Oct 2023.
- Looking more broadly, three of the five regional Fed indices saw improvements in January, whilst Kansas held steady for roughly a fourth consecutive month and Empire gave back some of its prior gains.
- Philly clearly stood out though, surging from -10.9 to 44.3 for the highest since the 44.4 in Apr 2021 and before that 1984.
- That biased the unweighted average of the five series firmly higher, rising from -3.9 to +7.4 for its first positive reading since May 2022.
- Taken directly, it points to an ISM manufacturing reading comfortably in the 50s at would be a sizeable beat, currently expected at 48.9 in Jan after 49.2 (released next Monday). However, the localized nature of regional strength suggests caution is needed.
GILT AUCTION PREVIEW: On offer next week
Jan-28 15:33
The DMO has announced it will be looking forward to sell GBP4.25bln of the 4.375% Mar-30 Gilt (ISIN: GB00BSQNRD01) at its auction next Tuesday, February 4.
PIPELINE: Corporate Bond Issuance Update: $2B Arab Republic of Egypt 2Pt Launch
Jan-28 15:22
- Date $MM Issuer (Priced *, Launch #)
- 01/28 $2B Carnival Corp 8NC3
- 01/28 $2B #Arab Republic of Egypt $1.25B 5Y 8.625%a, $750M 8Y 9.45%
- 01/28 $750M #Ziraat Bank 5Y 7.375%
- 01/28 $Benchmark American Express 6NC5 +100a, 6NC5 SOFR, 11NC10 +120a
- 01/28 $Benchmark Toronto-Dominion Bank 3Y +85a, 3Y SOFR, 7Y +105a
- 01/28 $Benchmark Capital One 11NC10 +195a
- 01/28 $Benchmark JPMorgan PerpNC5 7%a
- 01/28 $Benchmark Aircastle 5Y +137.5a
- 01/28 $Benchmark ForteBank 5Y 8%a
