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STIR: Just Under 65bp Of BoE Cuts Priced Through '25

STIR
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Modest dovish moves in GBP STIRs this morning, with core global bond markets a little firmer than they were at yesterday’s SONIA close.

  • BoE-dated OIS shows 20.5bp of cuts for February, 32.5bp of easing through March and 64.5bp through year-end. Contracts flat to 2bp more dovish vs. yesterday’s close.
  • SONIA futures also flat to +2.0.
  • Yesterday’s BoE vote split countered the recent run of hawkish repricing. We had previously suggested that the market-implied path of rate cuts looked a little shallow (when ~50bp of cuts were priced through year-end).
  • Most still think that the Bank holds a preference for quarterly rate cuts.
  • We looks for cuts in February and May, with the evolution of data over the next 6 months set to shape policy beyond that juncture.
  • Softer-than-expected UK retail sales data probably having a marginal dovish impact here, but the reading shouldn’t be a gamechanger for BoE policy, at least in isolation (See earlier bullets for great details).
  • Major macro focus on U.S. PCE data today.

BoE Meeting

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Modest dovish moves in GBP STIRs this morning, with core global bond markets a little firmer than they were at yesterday’s SONIA close.

  • BoE-dated OIS shows 20.5bp of cuts for February, 32.5bp of easing through March and 64.5bp through year-end. Contracts flat to 2bp more dovish vs. yesterday’s close.
  • SONIA futures also flat to +2.0.
  • Yesterday’s BoE vote split countered the recent run of hawkish repricing. We had previously suggested that the market-implied path of rate cuts looked a little shallow (when ~50bp of cuts were priced through year-end).
  • Most still think that the Bank holds a preference for quarterly rate cuts.
  • We looks for cuts in February and May, with the evolution of data over the next 6 months set to shape policy beyond that juncture.
  • Softer-than-expected UK retail sales data probably having a marginal dovish impact here, but the reading shouldn’t be a gamechanger for BoE policy, at least in isolation (See earlier bullets for great details).
  • Major macro focus on U.S. PCE data today.

BoE Meeting

Keep reading...Show less