GBP STIRs Once Again Price 50bp Of '24 Cuts

SONIA futures are flat to +3.0 through the blues, with core global bond markets a little firmer than levels seen at yesterday’s SONIA settlement window.

• BoE-dated OIS eases a little to once again price ~50bp of ’24 cuts vs. ~47.5bp late yesterday.
• Mixed monthly UK economic activity data is unlikely to have a meaningful impact on GBP STIR markets.
• Elsewhere, Goldman Sachs tweaked their BoE call. They now expect the Bank to slow to a quarterly pace of cuts after sequential easing at the June through Nov meetings. That leaves them forecasting 4 cuts this year (vs. 5 previously), 4 next year (unchanged) and 1 in 2026, to a terminal rate of 3.00%.
• In terms of domestic reasoning for their call, they write “the labour market remains tight, growth is starting to pick up, and wage growth and core inflation remain higher than in other advanced economies. In addition, our analysis points to risks that progress on services disinflation will slow later in 2024 because of greater persistence in wage and rent pressures.”
• Their wider calls for the major global central banks also factor in.
• Today will see focus on the Bernanke review of BoE forecasting (12:00 London), we will provide further colour on that matter ahead of the release.