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BoE Pricing Remains At Dovish End Of Recent Range As Core Global FI Rallies

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BoE-dated OIS contracts sit at the dovish end of the recently observed ranges, running little changed to 7bp softer, with the direction of travel aided by the richening in core global FI markets. Better than expected domestic retail sales data had little lasting impact, while UK political matters also failed to move the needle. That leaves a follow up 50bp hike at next month’s MPC meeting a little over 50% priced, with the 50/50 pricing mark the norm in the wake of this week’s CPI data. Beyond there, terminal policy rate pricing continues to show just over 5.90%. Flash PMI data headlines next week’s domestic docket and will cross on Monday.

BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Aug-235.312+38.2
Sep-235.588+65.8
Nov-235.755+82.5
Dec-235.829+89.8
Feb-245.844+91.3
Mar-245.829+89.8
May-245.781+85.0
Jun-245.713+78.3

source: MNI - Market News/Bloomberg

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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