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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