SEK: Pierced 50-day EMA As Intraday SEK Strength

• SOFR futures have pared some of their earlier gains but still see notable outperformance to EURIBOR and SONIA counterparts today, holding a relative gap richer ever since the open on perceived improved odds for Democrat candidate Harris in tomorrow’s presidential election.
• Implied yields are 3.5bps lower for the Dec’25 and 4bps lower for the Dec’26. The curve still sits within Friday’s post-payrolls range after the initially sharp rally was fully pared for 2025 contracts and beyond, with some assuming large weather impacts at play along with general data quality concerns after the lowest initial response rate since 1991.
• Euribor and Sonia futures meanwhile have seen minimal spillover, especially for the Sonia curve where implied yields are up to 4bps higher on the day for 2H25 contracts.

• In the UK, last week’s first Labour budget continues to weigh having seen only a modest pullback for terminal yields from fresh cycle highs. The implied terminal is still some 11.5bp higher than the day before the Budget having already lifted higher ahead of it with many of the measures leaked beforehand.
• The BoE is widely expected to cut 25bp on Thursday but with added attention on the extent of support for the move after the run up in terminal rate expectations in recent weeks.
• UK terminal rates continue to remain the exception compared to the US and Eurozone, where both remain comfortably below implied terminals seen early in the summer. 

Katy Balls at The Spectator posts on X that former chair of the House of Commons Treasury select committee Mel Stride has been appointed as shadow Chancellor of the Exchequer by the new Leader of the Opposition Kemi Badenoch. Balls also writes that former Home Secretary Priti Patel has been appointed as shadow Foreign Secretary. Both Stride and Patel ran for the leadership of the centre-right Conservative Party, with Patel eliminated in the first round of MPs voting and Stride in the second. 

• In terms of direct implications in the short term, the impact of these appointments is limited. The Conservatives sit in opposition with no power over gov't policy.
• Nevertheless, the appointments made by Badenoch will be watched to see what direction the Conservatives might take under her leadership (further to the right to counter Reform UK, or in a more centrist direction to win back disaffected voters who opted for Labour or the Liberal Democrats in July).
• Stride is seen as hailing from the moderate 'one nation' wing of the Conservative party, with his appointment to the second seniormost position potentially a sign of Badenoch, viewed as one of the most right-wing leadership candidates, looking to win over centrists who did not back her campaign.