MNI China Daily Summary: Wednesday, July 10

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CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

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MNI: US MBA: MARKET COMPOSITE -0.2% SA THRU JUL 05 WK

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Limited Moves In BoE Pricing Alongside Latest Bond Rally

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HomepageBank Of England (BOE) Market NewsBulletMarketsFixed Income BulletsForeign Exchange Bullets

The broader bid in core global FI markets helps underpin SONIA futures, but bulls can’t muster a meaningful extension of the early rally, leaving contracts flat to +6.5.

  • BoE-dated OIS shows 36.5bp of cuts through year end, for a less than 1bp net move on the day.
  • The lack of BoE messaging since the July 4 election was announced (as is the norm), as well as the lingering impact of the firmer-than-expected April CPI data and impact of this year’s hawkish moves in the BoE implied policy rate path, are probably factoring into the lack of a rebound in the pricing of cuts at this juncture.
  • U.S. JOLTS jobs data provides the next macro input, at 15:00 London.
  • Local focus remains on political matters, with the initial Sunak-Starmer TV debate scheduled for 21:00 London time.
  • The Conservatives still trail heavily in the opinion polls.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.200+0.0
Aug-245.113-8.7
Sep-245.041-15.9
Nov-244.918-28.2
Dec-244.835-36.5
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The broader bid in core global FI markets helps underpin SONIA futures, but bulls can’t muster a meaningful extension of the early rally, leaving contracts flat to +6.5.

  • BoE-dated OIS shows 36.5bp of cuts through year end, for a less than 1bp net move on the day.
  • The lack of BoE messaging since the July 4 election was announced (as is the norm), as well as the lingering impact of the firmer-than-expected April CPI data and impact of this year’s hawkish moves in the BoE implied policy rate path, are probably factoring into the lack of a rebound in the pricing of cuts at this juncture.
  • U.S. JOLTS jobs data provides the next macro input, at 15:00 London.
  • Local focus remains on political matters, with the initial Sunak-Starmer TV debate scheduled for 21:00 London time.
  • The Conservatives still trail heavily in the opinion polls.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.200+0.0
Aug-245.113-8.7
Sep-245.041-15.9
Nov-244.918-28.2
Dec-244.835-36.5