GBP Markets Hold Most Of Hawkish Adjustment

GBP STIR markets hang onto the bulk of their hawkish adjustments, with gilts at/around session lows.

• SONIA futures are flat to -8.0, with the strip bear steepening on the day (the move is pretty parallel in the late reds through blues).
• BoE-dated OIS still shows a little over 50/50 odds of a June cut, with ~56bp of easing priced through year end vs. closer to ~58bp late yesterday.
• Spill over from a hawkish EUR STIR reaction to comments from ECB’s Schnabel dominated in early London trade.
• UK and broader macro headline flow has been very limited over the last few hours, providing little in the way of fresh impetus for market participants.
• Tuesday’s address from BoE Governor Bailey (although the topic and setting mean that he may not cover current monetary policy matters) and Wednesday’s CPI data (with a particular focus on the services inflation components) provide the domestic focal points next week.