SONIA Futures A Touch Softer As BoJ-Induced Bond Move & German Data Feed In

SONIA futures are flat to 4.0bp softer through the blues, with the reds seeing the most pressure.

• BoE-dated OIS is little changed to 4bp firmer through ’24 MPC contracts. ~23bp of easing is now priced through the June MPC, after a 25bp cut was more than fully discounted yesterday. ~80bp of easing shows through ’24 on the whole.
• Asia-Pac hours were dominated by feedthrough from Japan, with recent rounds of BoJ communique resulting in speculation surrounding BoJ policy normalisation. A poorly received 30-Year JGB auction then added further weight to core global FI markets.
• A softer-than-expected round of German industrial production has provided some modest counter for Bunds during early European trade.
• UK STIRs are adjusting to these matters early on.
• Locally, Halifax house price data provided a second consecutive M/M rise, while the latest release from the BCC warned of slow UK economic growth over the coming years.
• The latest RTRS BoE poll has been published, with the findings of the survey suggesting that the BoE will leave its benchmark policy rate unchanged next week, as well as through Q224. RTRS noted that “a slim majority of participants said risks were tilted towards the first cut coming earlier.”
• The local docket is empty today.