May 23, 2024 06:52 GMT
GBP STIRs Hold Most Of Yesterday's Hawkish Move A Little Over 35bp Of '24 Cuts Priced
STIR
SONIA futures -0.5 to +3.0 through the blues, with a light flattening bias seen.
- Cycle lows were not generally tested on the move, with the exception being SFIU4, with bears looking to break support in that contract.
- BoE-dated OIS shows just 1.5bp of cuts for June after yesterday’s hawkish repricing, with ~36.5bp of cuts priced through year end.
- Local headline flow continues to focus on yesterday’s CPI data and political developments, although the latter did not have any tangible impact on markets.
- Our policy team's latest piece noted that "the Bank of England’s June meeting is likely to go ahead as planned despite general elections called for July 4, with precedent showing that Monetary Policy Committee votes have been held in the midst of political campaigning."
- Flash PMI data headlines the UK calendar today, with a focus on the passthrough of input costs to output prices, given the BoE’s focus/optimism surrounding that matter.
- Elsewhere, BoE chief economist Pill will speak at a conference, although the topic of the panel will be “The promise of macro-pru”, which limits the scope for meaningful rhetoric on broader monetary policy matters.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Jun-24 | 5.185 | -1.5 |
Aug-24 | 5.095 | -10.5 |
Sep-24 | 5.022 | -17.8 |
Nov-24 | 4.914 | -28.6 |
Dec-24 | 4.835 | -36.5 |
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