O/N Sonia fixed at 0.7019% up marginally......>

SONIA: O/N Sonia fixed at 0.7019% up marginally from 0.7002% on Friday. Volume

has ticked up to GBP39.25bln from GBP33.49bln. 

- The curve has broadly shifted higher over the past week, albeit with a 1.4bps

drop in the 1m OIS. 

- Beyond the 3y segment of the curve OIS spot rates have fallen 1-4bps. 

- The market is positioned for slightly less than one-full 25bps bank rate hike

in 2019, having fully-priced this outcome at the beginning of November. 

- Although some sort of Brexit fudge is still the more likely outcome than the

UK abruptly falling out of the EU in March, clearly the risk of the more

disorderly outcome has risen materially in recent weeks. 

- The binary nature of Brexit impacts (relative stability from a

fudge/compromise, or the upheaval from one of: no-deal/second referendum/snap

election) coupled with the lack of (real) visibility on parliament's intentions

leading into the 'meaningful vote' (many are still likely to vote for the deal

despite publicly criticising it) will make it difficult for money markets to

price the path for mon pol.