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STIR
The softer than expected UK CPI data results in the latest dovish leg lower in BoE-dated OIS. That leaves ~37.5bp of tightening showing for next month’s meeting, equating to a 50% chance of a follow up 50bp hike from the Bank. The liquid area of the BoE-dated OIS strip last shows 6-22bp lower on the day as a result of the data, with the strip flattening. Terminal policy rate pricing hovers around 5.90%.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Aug-23 | 5.308 | +37.8 |
| Sep-23 | 5.584 | +65.4 |
| Nov-23 | 5.757 | +82.8 |
| Dec-23 | 5.824 | +89.4 |
| Feb-24 | 5.835 | +90.5 |
| Mar-24 | 5.819 | +88.9 |
| May-24 | 5.775 | +84.5 |
| Jun-24 | 5.706 | +77.6 |
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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