EURJPY TECHS: Maintains A Bearish Tone
* RES 4: 161.35 61.8% retracement of the Dec 30 - Feb 10 bear leg * RES 3: 161.19 High Feb 13 * RES ...
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STIR: Just Over 70bp Of BoE Cuts Priced Through '25
The rally in core global FI (driven by questions surrounding U.S. tech dominance following Chinese advances in AI and tariff risks stemming from Trump’s second term) drives a light dovish move in GBP STIRs.
- BoE-dated OIS prices 71bp of cuts through year-end, with 22.5bp of cuts priced through February, 27bp of cuts priced through March and 42.5bp of easing showing through May. We continue to expect cuts at both the February and May meetings.
- SONIA futures are flat to +4.0.
- Last week’s dovish extremes are intact across both markets.
- Goldman Sachs continue to think the BoE will cut faster than the market expects.
- They suggest that “there is some upside risk to headline inflation later in the year due to price increases in water bills and private school fees, but the key for the direction of UK rates will be whether this is consistent with ongoing moderation in underlying inflation. We think it will be and that the current level of rates will prove too restrictive for the economy.”
- Little of note on the UK calendar this week, with next week’s BoE decision providing the next major UK risk event.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Feb-25 | 4.476 | -22.4 |
Mar-25 | 4.428 | -27.2 |
May-25 | 4.276 | -42.4 |
Jun-25 | 4.205 | -49.5 |
Aug-25 | 4.095 | -60.5 |
Sep-25 | 4.065 | -63.5 |
Nov-25 | 4.005 | -69.5 |
Dec-25 | 3.989 | -71.1 |
EQUITY TECHS: E-MINI S&P: (H5) Monitoring Support
- RES 4: 6200.00 Round number resistance
- RES 3: 6178.75 High Dec 6 and key resistance
- RES 2: 6163.75 High Dec 16
- RES 1: 6162.28 High Jan 24
- PRICE: 6038.50 @ 07:25 GMT Jan 27
- SUP 1: 6008.86/5961.75 50-day EMA / Low Jan 16
- SUP 2: 5943.94 61.8% retracement of the Jan 13 - 24 bull leg
- SUP 3: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
- SUP 4: 5809.00 Low Jan 13 and a key support
The S&P E-Minis contract is starting the week on a bearish note, extending the pullback from Friday’s high. Key short-term support to watch lies at 5961.75, the Jan 16 low. For now, the move down appears corrective, however, a breach of 5961.75 would strengthen a bearish threat and signal scope for a deeper retracement. This would open 5943.94, a Fibonacci retracement. Key resistance is unchanged at 6178.75, the Dec 6 high.
