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Light Dovish Move In SONIA Futures Following Israeli Reaction

STIR

A contained reaction to overnight events surrounding Iran & Israel for SONIA futures, with contracts little changed to +2.5 through the reds.

  • BoE-dated OIS shows ~45bp of cuts through year end, vs ~42bp late yesterday.
  • To recap, Iran has suggested that the Israeli response to its recent missile attack was tame (possibly completely ineffective).
  • Meanwhile, there was no apparent damage to Iranian nuclear sites.
  • That combination has allowed core global FI markets to move away from knee-jerk Asia highs that came on the back of the news re: the counter offensive.
  • Domestically, retail sales data was softer than expected, with marginal positive revisions to the prior month. Retail sales are expected to have a small positive impact on Q1 GDP.
  • Looking ahead, comments from BoE’s Ramsden & Mann headline the domestic calendar today.
  • Geopolitical headline flow will receive heightened interest given overnight events.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.196-0.2
Jun-245.116-8.3
Aug-245.008-19.0
Sep-244.932-26.6
Nov-244.826-37.3
Dec-244.753-44.6
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A contained reaction to overnight events surrounding Iran & Israel for SONIA futures, with contracts little changed to +2.5 through the reds.

  • BoE-dated OIS shows ~45bp of cuts through year end, vs ~42bp late yesterday.
  • To recap, Iran has suggested that the Israeli response to its recent missile attack was tame (possibly completely ineffective).
  • Meanwhile, there was no apparent damage to Iranian nuclear sites.
  • That combination has allowed core global FI markets to move away from knee-jerk Asia highs that came on the back of the news re: the counter offensive.
  • Domestically, retail sales data was softer than expected, with marginal positive revisions to the prior month. Retail sales are expected to have a small positive impact on Q1 GDP.
  • Looking ahead, comments from BoE’s Ramsden & Mann headline the domestic calendar today.
  • Geopolitical headline flow will receive heightened interest given overnight events.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.196-0.2
Jun-245.116-8.3
Aug-245.008-19.0
Sep-244.932-26.6
Nov-244.826-37.3
Dec-244.753-44.6