SONIA Futures A Little Higher On CPI, 70bp Of '24 BoE Cuts Price

CPI data pushes SONIA futures a little higher, contracts flat to +5.5 through the blues.

• BoE-dated OIS adds a little more rate cut premium, last showing ~70bp of ’24 cuts.
• As noted elsewhere, Y/Y services CPI data met the MPC’s forecast despite the headline reading printing 0.1ppt below BBG median and BoE expectations.
• Sticky services inflation will remain a worry for the Bank and will be capping the early rally in GBP STIRs.
• Wage growth will also remain under scrutiny.
• Overnight the XpertHR wage growth measure printed at the lowest level seen since late ’22, along with flagging expectations for a moderation in pay growth in ‘24 vs. ’23 (see earlier bullet for more details there).
• Elsewhere, some comments from Chancellor Hunt have increased speculation re: October General election timing.
• Hunt also pointed to a pre-election fiscal event, which is already widely expected.
• Domestic focus now moves to tomorrow’s BoE decision. See our full preview of that event here.