Just Over 40bp Of '24 BoE Cuts Priced

SONIA futures have moved away from yesterday’s late lows, reflecting the stabilisation in wider core global FI markets.

• Contracts last -1.5 to +2.5
• BoE-dated OIS shows 7bp of cuts for next month’s meeting and ~41.5bp of easing across the 3 remaining MPC decisions of ’24.
• The pullback from last week’s risk-off-driven dovish extremes provides a more realistic feel to the market-implied rate path, particularly with the BoE unwilling to commit to quickfire follow up rate cuts.
• Still, the market currently leans more towards the idea of 2 further 25bp rate cuts before year end, as opposed to 1.
• Domestic retail sales data was broadly in line with expectations and won't alter perceptions within the MPC.
• Expect broader risk sentiment to dominate ahead of the weekend, with nothing in the way of major UK data/speakers due today.