SONIA Futures A Little Firmer Alongside Bonds

An uptick in wider core global FI markets vs. levels seen at yesterday's SONIA settlement bias SONIA futures higher to start the day, with contracts through the blues running flat to 4bp firmer.

• BoE-dated OIS is little changed to ~4bp softer through '24 MPC contracts. ~103bp of cuts are priced through '24 on the whole, after that measure had a look below 100bp yesterday.
• The first 25bp cut is still fully discounted come the end of the June '24 MPC.
• Digestion of the latest RRR cut from the PBoC will dominate early London trade.
• Fiscal matters remain front and centre when it comes to local headline flow, with back and forths surrounding potential tax cuts at the fore.
• Elsewhere, PM Sunak remains under political pressure, with an ex-Cabinet Minister calling for him to stand down.
• XpertHR median basic pay award in the 3 months to the end of December 2023 remained at +6% for the third consecutive month. XpertHR believe “pay awards have peaked from last year, with more than half of 2024 deals expected to be lower than those awarded in 2023.” Some January 2024 pay deals are coming through, and the Xpert HR senior content manager said “almost half of January 2024 pay deals are lower than the same employees received a year ago.”
• Flash PMI data headlines domestically today.