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Markets Continue To Question Likelihood Of Further BoE Hikes

STIR

BoE-dated OIS stabilises in recent trade, showing around ~9bp of tightening for the Bank’s November meeting, while terminal policy rate pricing shows ~17.5bp above prevailing levels.

  • Contracts are 1-5bp softer on the day, with the strip flattening.
  • The recent soft run of data, most recently evidenced in this morning’s worrying flash services PMI survey, coupled with the Bank’s choice to leave interest rates unchanged yesterday, ;eaves participants questioning if the Bank will deploy any further rate hikes in the current cycle.
  • One further hike is roughly ~70% priced at present.
  • A quick reminder that plenty of sell-side names now see the BoE as done with hikes, expect a full round up of those views in our BoE review document.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Nov-235.277+9.2
Dec-235.335+15.0
Feb-245.361+17.6
Mar-245.359+17.4
May-245.325+14.1
Jun-245.267+8.2
Aug-245.176-0.9
Aug-245.068-11.7

Source: MNI - Market News/Bloomberg

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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