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Retail Sales Data Pressures UK STIR Markets

STIR

The firmer-than-expected domestic retail sales data applies pressure to SONIA markets at the open (volatile nature/details of the print limit the move).

  • On top of that, weakness in core global FI markets, largely linked to Fedspeak, will also be feeding in.
  • SONIA futures run flat to -5.0 as a result, off early lows.
  • BoE-dated OIS sits flat to 4bp firmer through ’24 contracts, with ~72bp of cuts priced through year-end.
  • Labour’s double by-election win dominates local newswires.
  • Elsewhere, there is widespread speculation re: Chancellor Hunt dropping plans for a 2p cut in income tax owing to the technical recession.
  • Looking ahead, comments from BoE’s Pill headline the local docket into the weekend (19:40 London).
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Mar-245.197+0.8
May-245.141-4.7
Jun-245.060-12.9
Aug-244.910-27.9
Sep-244.777-41.2
Nov-244.604-58.5
Dec-244.470-71.9
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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