Little Change In SONIA Markets, ~35bp Of '24 BoE Cuts Priced

SONIA futures are effectively unchanged through the blues, with Bund futures hovering around yesterday’s settlement levels

• BoE-dated OIS shows ~35bp of cuts through ’24, with the first full 25bp cut priced through the end of the Nov MPC, little changed on the day.
• A reminder that softer-than-expected U.S. data helped promote a dovish move on Monday.
• Still, we stick to the hawkish end of the ’24 range, but ’24 & ’25 SONIA futures have stabilised.
• UK headline flow continues to be dominated by political matters, ahead of today’s initial Sunak-Starmer TV debate.
• Labour continues to hold a huge lead in the opinion polls, while Nigel Farage has announced his intentions to run for a seat, leading the Reform UK Party.
• BRC like-for-like sales saw a much shallower than expected rebound in May.
• There isn’t much in the way of scheduled UK risk events ahead of the debate flagged above (which will get underway at 21:00 London), which will likely leave focus on broader headline flow and cross-market spill over.