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STIR: Just Over 60bp Of BoE Cuts Priced For ’25, Path Looks A Little Flat

STIR
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SONIA futures flat to -5.0 given the weakness in the long end.

  • Little net movement in BoE pricing on the day, with ~61bp of cuts priced through ’25.
  • The market-implied rate cutting cycle still looks a little shallow to us, although it is far more realistic than the ~45bp of cuts briefly priced ahead of last week’s BoE decision.
  • February and May cuts are still looking likely.
  • Beyond there, the Bank will be on the lookout for evidence of the scale of 2025 wage increases (Q1/April data available by the June MPC meeting) and the passthrough to annual indexation for services CPI (April/May data also available by the June MPC meeting).
  • UK news limited since this morning’s marginal mark lower in final Q3 GDP data.

BoE Meeting

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SONIA futures flat to -5.0 given the weakness in the long end.

  • Little net movement in BoE pricing on the day, with ~61bp of cuts priced through ’25.
  • The market-implied rate cutting cycle still looks a little shallow to us, although it is far more realistic than the ~45bp of cuts briefly priced ahead of last week’s BoE decision.
  • February and May cuts are still looking likely.
  • Beyond there, the Bank will be on the lookout for evidence of the scale of 2025 wage increases (Q1/April data available by the June MPC meeting) and the passthrough to annual indexation for services CPI (April/May data also available by the June MPC meeting).
  • UK news limited since this morning’s marginal mark lower in final Q3 GDP data.

BoE Meeting

Keep reading...Show less