April 26, 2024 06:54 GMT
GBP STIRs Also Stabilise, A Little Over 40bp Of '24 BoE Cuts Priced
STIR
SONIA markets also stabilise as Bunds edge higher, with futures -0.5 to +1.5.
- BoE-dated OIS shows a little over 40bp of cuts through '24, with the first 25bp cut fully discounted through the September MPC meeting.
- Local headline flow has been limited since yesterday’s close, leaving focus on dovish ECB speak and the broader market reaction to the latest BoJ policy decision.
- The UK calendar is very limited into the weekend, which will leave focus on cross-market moves and macro headlines.
- Pricing of BoE cuts operates at the shallower end of the recent range, with feedthrough from Fed pricing continuing to have a meaningful impact. Comments from BoE leadership (Bailey & Ramsden) have been more dovish than recent offerings from Greene & Pill, perhaps pointing to the potential for some divergence from Fed policy as ’24 develops.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
May-24 | 5.204 | +0.5 |
Jun-24 | 5.126 | -7.4 |
Aug-24 | 5.004 | -19.5 |
Sep-24 | 4.941 | -25.8 |
Nov-24 | 4.840 | -35.9 |
Dec-24 | 4.779 | -42.0 |
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