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BoE Pricing Shows 75bp Of '24 Cuts

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BoE-dated OIS trades towards dovish session extremes that came on the back of feedthrough from some of the more dovish BoE rhetoric at the latest TSC hearing.

  • 75bp of cuts are priced through '24 vs. ~68bp at yesterday's close.
  • The latest RTRS poll indicated that August will herald the first BoE rate cut vs. Q2 in the January poll (majorities being slim in both instances).
  • This slight push back in rate cut timing generally tracks the recent evolution of market pricing.
  • A quick reminder that while BoE Governor Bailey & Deputy Governor Broadbent didn't endorse market pricing they didn't firmly push back against it.
  • Bailey repeated that inflation does not have to be at target for the Bank to start cutting rates.
  • Still, he stressed that more evidence is needed re: a moderation in inflation before rate cuts can be implemented.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Mar-245.197+1.0
May-245.141-4.6
Jun-245.043-14.4
Aug-244.880-30.7
Sep-244.744-44.3
Nov-244.571-61.6
Dec-244.438-75.0
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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