Dovish Impulses From Elsewhere Support SONIA Futures

The core global FI impulses flagged elsewhere (post-FOMC minutes and in the wake of the early rounds of European CPI data prints) biased SONIA futures higher in early pre-gilt trade.

• Bonds have edged away from best levels which has capped the move in SONIA, allowing a tick away from early dovish extremes.
• Contracts through the blues sit 0.5-7.5bp firmer on the day, with the reds & greens outperforming.
• BoE-dated OIS is flat to 2bp softer on the session. ~146.5bp of cuts are now priced through ’24 (a reminder that we saw a few forays beyond 150bp of cuts being priced ahead of the turn of the year).
• Local news flow has been light. The latest release from the BCC pointed to muted investment growth in the UK due to economic worry and interest servicing costs.
• Final services PMI data and the BoE DMP survey headline the domestic docket today.