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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
STIR
BoE-dated OIS fully prices a 25bp hike later today, which would take the Bank policy rate to 4.50%, while terminal rate pricing currently envisages just over 40bp of further tightening beyond today (assuming a 25bp hike is delivered), indicating a terminal BoE policy rate of just over 4.90%.
- In terms of today’s meeting, the Bank’s guidance currently states that “if there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required.” It feels fairly clear to us, sell- side economists and the market that we have seen that evidence. In terms of the vote split, we also agree with consensus that 7-2 is the most likely outcome with both Dhingra and Tenreyro voting for unchanged rates. Outside the vote split and immediate decision, the main focus will fall on the Bank’s guidance and economic forecasts (click here for our full preview).
- Sell-side consensus on the endpoint for the hiking cycle is more mixed, with terminal rate views residing in the 4.50-5.00% range (with the majority in the lower half of that range and plenty of variance when it comes to post-terminal rate policy views evident).
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| May-23 | 4.434 | +25.7 |
| Jun-23 | 4.617 | +44.0 |
| Aug-23 | 4.769 | +59.2 |
| Sep-23 | 4.842 | +66.4 |
| Nov-23 | 4.837 | +66.0 |
| Dec-23 | 4.783 | +60.5 |
| Feb-24 | 4.689 | +51.2 |
| Mar-24 | 4.565 | +38.8 |
source: MNI - Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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