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SONIA Firms On Wider Bond Bid

STIR

SONIA futures draw support from the post-Monday settlement move higher in core global FI markets, with expectations surrounding U.S. Tsy issuance and economic worry re: China the dominant factors in that window.

  • Futures run +0.5 to +5.0 as a result, with the strip flattening, although volume is very light.
  • BoE-dated OIS is flat to -1.5bp across ’24 contracts, showing ~112bp of cuts through the calendar year.
  • The space is a little off early dovish session extremes.
  • BRC shop price data revealed the shallowest Y/Y rise seen since May ’22 (+2.9%), which provides a (modest) local input for the early dovish move in SONIA markets.
  • Note that Chief Executive of the BRC cautioned whilst progress is being made re: inflation, "rising geopolitical tensions will also add to uncertainty and costs in supply chains."
  • Money supply and lending readings headline a limited local data docket.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Feb-245.201+1.3
Mar-245.171-1.6
May-245.057-13.0
Jun-244.883-30.4
Aug-244.657-53.0
Sep-244.460-72.8
Nov-244.233-95.5
Dec-244.070-111.8
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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