SONIA Futures A Little Firmer, BoE Pricing Little Changed

SONIA futures are flat to +3.0 through the blues. Core global FI markets are in line to a touch above levels seen at the close of Friday’s shortened UK STIR session.

• BoE-dated OIS is little changed to ~1bp softer through ’24 MPC contracts.
• The first 25bp cut is more than fully discounted come the end of the May MPC, with ~145bp of cuts showing through ’24.
• Local headlines continue to focus on the potential for fiscal loosening ahead of the ’24 election, while there has also been increased coverage of late Thursday comments from BoE MPC member Haskel.
• Haskel’s comments read dovishly, particularly when married up to his history of hawkish dissent, although that will have largely been priced in on Friday, in the run up to the Christmas break.
• The local docket is limited in the gap between Christmas and the start of ’24.