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Sep BoE Cut No Longer Fully Priced

STIR
HomepageBank Of England (BOE) Market NewsBulletMarketsFixed Income BulletsForeign Exchange Bullets

Yesterday’s late move lower in U.S. Tsy futures feeds into GBP STIR markets, with no live European readthrough given the widespread observance of the Labour Day holiday on the continent.

  • SONIA futures are little changed to 2.0bp lower to start the day.
  • Yesterday’s hawkish move in BoE-dated OIS holds, leaving ~37.5bp of cuts priced through ’24.
  • The first 25bp move is no longer fully priced through the end of the Sep MPC, although current pricing still indicates over 90% odds of such a move playing out.
  • Nationwide house price data was softer than expected, but that shouldn’t be a market mover.
  • Looking ahead, final UK manufacturing PMI data is due today. But greater focus will be placed on cross-market setup ahead of the U.S. FOMC decision.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.206+0.6
Jun-245.137-6.3
Aug-245.026-17.4
Sep-244.971-22.9
Nov-244.880-32.0
Dec-244.825-37.5
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Yesterday’s late move lower in U.S. Tsy futures feeds into GBP STIR markets, with no live European readthrough given the widespread observance of the Labour Day holiday on the continent.

  • SONIA futures are little changed to 2.0bp lower to start the day.
  • Yesterday’s hawkish move in BoE-dated OIS holds, leaving ~37.5bp of cuts priced through ’24.
  • The first 25bp move is no longer fully priced through the end of the Sep MPC, although current pricing still indicates over 90% odds of such a move playing out.
  • Nationwide house price data was softer than expected, but that shouldn’t be a market mover.
  • Looking ahead, final UK manufacturing PMI data is due today. But greater focus will be placed on cross-market setup ahead of the U.S. FOMC decision.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.206+0.6
Jun-245.137-6.3
Aug-245.026-17.4
Sep-244.971-22.9
Nov-244.880-32.0
Dec-244.825-37.5