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Hawkish GBP STIR Move Sticks

STIR

GBP STIRs haven’t threatened to retrace their hawkish CPI-driven moves, with several sell-side names removing their call for a June BoE cut in the time since the release.

  • SONIA futures haven’t tested recent cycle lows but are as much as 18.5bp softer on the day at typing, a little off session lows.
  • BoE-dated OIS shows a mere 2bp of cuts for the June meeting, vs. ~11bp at yesterday’s close.
  • Pricing for the August meeting sticks below 50/50 odds of a 25bp cut through that juncture, after nearly fully discounting such a move at yesterday’s close.
  • 37bp of easing is priced through year end vs. ~53bp yesterday.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.182-1.8
Aug-245.087-11.3
Sep-245.011-18.9
Nov-244.905-29.5
Dec-244.829-37.1
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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