STIR: Just Over 55bp Of BoE Cuts Priced Through Dec
Modest dovish drift in GBP STIRs this morning, with Bunds underpinned and UK GDP data printing on the soft side.
- Still, the moves are limited.
- BoE-dated OIS flat to 1bp lower across ’25 meetings.
- 56.5bp of cuts priced through year-end, with 19bp showing through May, 25bp through June and 40bp through August.
- SONIA futures flat to +4.0, extending yesterday’s post settlement gains.
- The latest BoE/Ipsos inflation attitudes survey will be released later this morning.
- Little else of note on the UK calendar, which will leave macro & cross-market cues front and centre.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.457 | +0.2 |
May-25 | 4.263 | -19.2 |
Jun-25 | 4.203 | -25.2 |
Aug-25 | 4.056 | -39.9 |
Sep-25 | 4.008 | -44.6 |
Nov-25 | 3.912 | -54.3 |
Dec-25 | 3.889 | -56.6 |
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SWEDEN: Unemployment Claims Rate Looks To Have Stopped Rising
The Swedish unemployment claims rate was 7.0% for the third consecutive month in January. This supports our view that while overall labour market conditions remain subdued, it appears as though we have passed the peak pace of deterioration. This underscores expectations for the Riksbank to remain on hold in March, as its assesses the impact of past hikes on the economy.
- Total vacancies were ~100k in January, little changed from December. Relative to a year-ago, vacancies have fallen 22% Y/Y.
- 5k people were served redundancy notices in January. The 3mma of 5.1k remains below last year’s peak of 7.1k.
- January LFS data is due next Monday morning.
STIR: BoE Pricing Steady, 60bp Of Cuts Showing Through Year-End
GBP STIRs little changed at the open.
- BoE-dated OIS prices ~60bp of cuts through year-end.
- ~5bp of easing priced for March, with a 25bp cut more or less fully discounted through the May MPC (we currently look for the next cut to be deployed in May).
- SONIA futures -0.5 to +1.0.
- NIESR’s latest work suggests that the BoE will deploy only one further 25bp rate cut in 2025 and another in 2026, with Bank Rate troughing at 4.00% (current market pricing shows bank rate at ~3.85% by year-end).
- Comments from BoE MPC member Greene due today (15:00 GMT).
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.405 | -4.9 |
May-25 | 4.205 | -24.9 |
Jun-25 | 4.126 | -32.8 |
Aug-25 | 3.978 | -47.6 |
Sep-25 | 3.943 | -51.1 |
Nov-25 | 3.873 | -58.1 |
Dec-25 | 3.858 | -59.6 |
EQUITY TECHS: E-MINI S&P: (H5) Short-Term Reversal Threat Still Present
- RES 4: 6178.75 High Dec 6 and key resistance
- RES 3: 6162.25 High Jan 24
- RES 2: 6147.75 High Jan 31
- RES 1: 6123.25 High Feb 7
- PRICE: 6086.50 @ 07:24 GMT Feb 12
- SUP 1: 6014.00/5935.50 Low Feb 10 / 3
- SUP 2: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
- SUP 3: 5842.50 Low Jan 14
- SUP 4: 5809.00 Low Jan 13 and a key resistance
Price action on Feb 3 in the S&P E-Minis contract continues to highlight a possible short-term reversal threat. If correct, it suggests that the latest bounce is a correction. A resumption of weakness would open 5892.37, a Fibonacci retracement point. On the upside, a stronger rally would expose key resistance at 6178.75, the Dec 6 ‘24 high. Clearance of this hurdle would resume the primary uptrend.
