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GILTS: Sharp Removal In Pricing Of BoE Rate Cuts In '25 On Budget Details

STIR

The immediate inflationary impact of today’s fiscal policy choices, coupled with long end weakness linked to the supply outlook, generates hawkish repricing in the GBP short end.

  • BoE-dated OIS now prices 21bp of cuts for November, 31.5bp of cuts through year-end and 82bp of cuts through June.
  • That compares to 23bp, 39.5bp and 105bp pre-Budget.
  • SONIA futures now 0.5 to 16.5bp lower on the day, contracts as much as 26.0 ticks off intraday highs.

BoE Meeting

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The immediate inflationary impact of today’s fiscal policy choices, coupled with long end weakness linked to the supply outlook, generates hawkish repricing in the GBP short end.

  • BoE-dated OIS now prices 21bp of cuts for November, 31.5bp of cuts through year-end and 82bp of cuts through June.
  • That compares to 23bp, 39.5bp and 105bp pre-Budget.
  • SONIA futures now 0.5 to 16.5bp lower on the day, contracts as much as 26.0 ticks off intraday highs.

BoE Meeting

Keep reading...Show less