August 22, 2024 08:53 GMT
Lower Post-PMIs, Mixed Inflation Inputs Limit Hawkish Move
GILTS
Fresh lows for futures on the firmer-than-expected domestic PMI data.
- Contract trades as low as 99.83, support at the 20-day EMA (99.59) untested.
- Yields 2-3p higher across the curve, light bear steepening seen.
- 2s10s and 5s30s still comfortably below August highs.
- SONIA futures flat to -2.0, BoE-dated OIS shows ~41bp of cuts through Dec vs. ~43bp pre-data.
- The survey provided mixed inputs for BoE policy, limiting hawkish reaction.
- The surveys suggested that services price inflation is moving lower. Although some MPC members will be concerned that core goods prices look to be picking up earlier than previously expected.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Sep-24 | 4.897 | -5.3 |
Nov-24 | 4.680 | -27.0 |
Dec-24 | 4.541 | -40.9 |
Feb-25 | 4.340 | -61.1 |
Mar-25 | 4.193 | -75.7 |
May-25 | 4.032 | -91.8 |
Jun-25 | 3.934 | -101.6 |
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