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SONIA A Little Firmer On GDP Miss

STIR

SONIA futures are 0.25-2.5bp firmer through the blues, looking to softer than expected monthly domestic GDP data, as opposed to the hawkish repricing on the ECB-dated OIS strip.

  • The services sector drove the miss.
  • Volumes are light, as participants await cues after gilts open.
  • This data in some ways may have more impact on the upcoming MPC decisions than yesterday's labour market data that showed a further deterioration of the labour market but with wage growth still uncomfortably high.
  • Next week's inflation data is still of great importance and we still see a September hike as the most likely outcome, but today's data increases the probability of a pause in future meetings.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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