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Holding Off Post-FOMC Dovish Extremes On BoE's Steady Tone

STIR

Core global FI markets sit in line with/a touch below levels seen at yesterday's SONIA settlement window, leaving SONIA futures flat to 2.5bp lower early on Friday.

  • BoE-dated OIS trades in similar territory to levels seen in the latter rounds of post-BoE dealing, after the BoE's consistent tone helped the space away from post-FOMC dovish extremes.
  • ~109bp of cuts are priced through '24 as result (that measure briefly moved over 125bp yesterday).
  • Further forward, markets price ~80% odds of a 25bp cut through the end of the May '24 MPC.
  • Local headline flow has been fairly limited overnight, with GfK consumer confidence data matching exp., residing comfortably in negative territory.
  • Flash PMI data headlines the UK data docket today. Elsewhere, BoE Deputy Governor Ramsden will speak.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Feb-245.202+1.5
Mar-245.141-4.6
May-244.984-20.3
Jun-244.818-36.9
Aug-244.623-56.5
Sep-244.435-75.2
Nov-244.246-94.1
Dec-244.097-109.0
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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