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BoE Terminal Pricing Stalls Around 6%, Over 30bp Of Tightening Still Priced For This Week

STIR

The recent bid in BoE-dated OIS runs out of steam (for now) as hawkish participants fail to press terminal policy rate pricing above 6.00%, before the measure eases back to show just below 5.95%.

  • As noted elsewhere, local news flow has been limited, outside of some light relief for shoppers when it comes to the rate of grocery price inflation.
  • Participants remain focused on tomorrow’s inflation report, ahead of the latest BoE monetary policy decision (Thursday). All of those surveyed by BBG look for a 25bp hike re: the latter. Market pricing remains a little more aggressive, showing ~30bp of tightening for the event.
  • A reminder that a tighter than expected UK labour market and supply side constraints have been front and centre in recent sessions.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-234.731+30.3
Aug-235.099+67.1
Sep-235.386+95.8
Nov-235.618+119.0
Dec-235.786+135.8
Feb-245.863+143.5
Mar-245.86+143.2
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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