EM ASIA CREDIT: MNI EM Credit Market Wrap - Asia
10y U.S. Treasuries yields end up being 2.5bp tighter in Asia, with yields currently at 4.3%. This f...
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STIR: Still Less Than 60bp OF BoE Cuts Priced Through Year-End
GBP STIRs seemingly reacting to the overnight bid in Tsys as opposed to the downtick in Bunds, resulting in modest dovish moves.
- BoE-dated OIS flat to 2bp more dovish across ’25 meetings.
- 58.5bp cuts priced through year-end, with ~80% odds of a cut priced through May and ~26.5bp showing through June, sticking to multi-week ranges.
- We still look for a cut in May.
- SONIA futures flat to +2.5.
- We have entered the MPC’s quiet period ahead of next week’s monetary policy decision.
- An unchanged Bank Rate is almost universally expected here (pricing covering the event has tended to 0bp in recent weeks).
- Deputy Governor Ramsden’s speech on Friday 28 February (in which he sounded less dovish but not completely ruling out a sequential rate cut vote) and last week’s TSC hearing (in which Governor Bailey sounded no closer to voting for a sequential cut) have left the arithmetic pointing firmly in favour of a hold next week.
- Little of note on the UK calendar today.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.455 | +0.0 |
May-25 | 4.263 | -19.2 |
Jun-25 | 4.191 | -26.4 |
Aug-25 | 4.051 | -40.4 |
Sep-25 | 4.001 | -45.4 |
Nov-25 | 3.902 | -55.3 |
Dec-25 | 3.870 | -58.5 |
EURJPY TECHS: Short-Term Reversal
- RES 4: 164.08 High Jan 24 and a key resistance
- RES 3: 162.70 High Jan 28
- RES 2: 161.80 High Jan 30
- RES 1: 161.28 High Mar6
- PRICE: 159.94 @ 07:34 GMT Mar 11
- SUP 1: 158.65 20-day EMA
- SUP 2: 155.60 Low Mar 4
- SUP 3: 154.80 Low Feb 28 and a bear trigger
- SUP 4: 154.42 Low Aug 5 ‘24 and key medium-term support
EURJPY is holding on to its recent gains. Last week’s rally undermines a recent bearish threat and instead highlights a potential reversal. The cross has pierced resistance at 161.19, the Feb 13 high. A clear break of the hurdle would strengthen a bullish condition. Initial support to watch is 158.65, the 20-day EMA. Key support has been defined at 154.80, the Feb 28 low.
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