July 01, 2024 06:52 GMT
Light Hawkish Moves For SONIA As French Politics Dominates
STIR
SONIA futures are +0.25 to -3.0 through the blues, with the previously covered weakness in Bunds, generated by the outcome of the first round of the French election, dominating early this week.
- BoE-dated OIS is little changed to 2bp higher through mid-’25 meetings, leaving ~13.5bp of cuts priced for August and ~42bp of cumulative easing showing through year end.
- This comes after the move away from recent dovish extremes.
- Final manufacturing PMI headlines the domestic calendar today, with lending and money supply data also due.
- Looking further ahead, Wednesday will see the final services PMI reading, while Thursday will bring the release of the BoE’s latest DMP survey.
- The general election will be held on Thursday and we should have a good indication of the outcome early on Friday morning. Given the picture provided by opinion polls, focus is set to fall on the scale of the likely Labour majority.
- Expect our political risk team’s full preview of that event in the coming days.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Aug-24 | 5.064 | -13.6 |
| Sep-24 | 5.007 | -19.3 |
| Nov-24 | 4.873 | -32.7 |
| Dec-24 | 4.783 | -41.7 |
| Feb-25 | 4.651 | -54.9 |
| Mar-25 | 4.567 | -63.3 |
| May-25 | 4.449 | -75.1 |
| Jun-25 | 4.361 | -83.9 |
Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.
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