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STIR: BoE Pricing Steady Just Under 60bp Of Cuts Through Dec, Tariff Risk Eyed

STIR

UK focus is centred on increased risk of U.S. tariffs, owing to President Trump’s intention to deploy levies on countries that use VAT.

  • Although a period before reciprocal tariffs are implemented by the U.S. (early April) seemingly provides a negotiating window.
  • GBP STIRs little changed to slightly more hawkish as a result.
  • BoE-dated OIS showing ~58bp of cuts through year-end, little changed on the day.
  • ~90% odds of a 25bp cut priced through the end of the May MPC, which is when we look for the BoE to deliver its next rate cut.
  • SONIA futures flat to 2.5 lower.
  • Expect macro and cross-market cues to dominate ahead of the weekend.
  • Little of note on the UK calendar today, with labour market (Tuesday) & inflation (Wednesday) data headlining next week.

BoE Meeting

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UK focus is centred on increased risk of U.S. tariffs, owing to President Trump’s intention to deploy levies on countries that use VAT.

  • Although a period before reciprocal tariffs are implemented by the U.S. (early April) seemingly provides a negotiating window.
  • GBP STIRs little changed to slightly more hawkish as a result.
  • BoE-dated OIS showing ~58bp of cuts through year-end, little changed on the day.
  • ~90% odds of a 25bp cut priced through the end of the May MPC, which is when we look for the BoE to deliver its next rate cut.
  • SONIA futures flat to 2.5 lower.
  • Expect macro and cross-market cues to dominate ahead of the weekend.
  • Little of note on the UK calendar today, with labour market (Tuesday) & inflation (Wednesday) data headlining next week.

BoE Meeting

Keep reading...Show less