USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4229 @ 07:53 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
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STIR: Less Than 60bp Of BoE Cuts Priced Through '25
GBP STIRs Remain more hawkish than what was seen at yesterday’s settlement levels, with late Tuesday weakness in core global FI markets driving price action into the close.
- BoE-dated OIS flat to 2bp more hawkish, showing 3bp of cuts for next month, 26bp through March, 44bp of cuts through June and 59bp of cuts through December ’25.
- Nearly 25bp of cuts have been removed from pricing through Dec ’25 since the Budget.
- Both domestic and global inflationary risks have factored into the hawkish move.
- SONIA futures flat to -3.5.
- BoE arch hawk Mann will speak this morning (09:45 London), although may not touch on monetary policy. Her Thursday appearance is likely to generate greater interest.
- Elsewhere, spill over from the U.S. CPI data will also be eyed.
BoE Meeting | SONIA BoE-Dated OIS (%) | Current Effective SONIA Rate (bp) |
Dec-24 | 4.673 | -2.7 |
Feb-25 | 4.505 | -19.5 |
Mar-25 | 4.436 | -26.4 |
May-25 | 4.298 | -40.2 |
Jun-25 | 4.257 | -44.3 |
Aug-25 | 4.190 | -51.0 |
Sep-25 | 4.160 | -54.0 |
Nov-25 | 4.116 | -58.4 |
Dec-25 | 4.106 | -59.4 |
GILT AUCTION PREVIEW: 4.375% Mar-28 Gilt
- The DMO will return to the market this morning to launch the new long 3-year 4.375% Mar-28 gilt for GBP4.0bln.
- The gilt replaces the 3.75% Mar-27 gilt as the on-the-run issue (which was launched in January).
- All eight auctions of the 3.75% Mar-27 gilt saw auction sizes of GBP3.75-4.00bln, bid-to-covers in excess of 3x (ranging from 3.01-3.68bp, 3.29x mean) but tails have been a bit more variable ranging from 0.3-0.6bp (0.6bp last).
- We see a similarly strong volume of demand at the launch today, but are again wary of a relatively wide tail.
- Timing: Results will be published shortly after the auction window closes at 10:00GMT with a further GBP1.0bln available to successful bidders via the PAOF.
