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SONIA Futures Edge Lower Alongside Peers, 54bp Of '24 BoE Cuts Priced

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HomepageBank Of England (BOE) Market NewsBulletMarketsFixed Income BulletsForeign Exchange Bullets

SONIA futures follow core global FI peers lower.

  • Contracts are flat to -3.5.
  • BoE-dated OIS show just under 50/50 odds of a June cut.
  • A full 25bp move isn’t quite fully discounted through the end of the August MPC, with ~54bp of easing showing through year end.
  • ’24 contracts are within 1bp of Friday’s close.
  • The death of the Iranian President hasn’t provided a tangible increase in the geopolitical risk premium.
  • Meanwhile, weekend UK headline flow was confined to an uptick in the Rightmove house price index and news that a group of Conservative Party backbenchers has demanded a review of the BoE’s independence. Neither of those matters should be market moving.
  • Outgoing BoE Deputy Governor Broadbent will deliver a ‘workshop’ on “New evidence on the Monetary Transmission Mechanism work” this morning, headlines could start to filter out from 10:00 London.
  • Elsewhere, the DMO will hold its quarterly consultation with investors/GEMM.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.079-12.1
Aug-244.958-24.3
Sep-244.862-33.8
Nov-244.742-45.8
Dec-244.655-54.5
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SONIA futures follow core global FI peers lower.

  • Contracts are flat to -3.5.
  • BoE-dated OIS show just under 50/50 odds of a June cut.
  • A full 25bp move isn’t quite fully discounted through the end of the August MPC, with ~54bp of easing showing through year end.
  • ’24 contracts are within 1bp of Friday’s close.
  • The death of the Iranian President hasn’t provided a tangible increase in the geopolitical risk premium.
  • Meanwhile, weekend UK headline flow was confined to an uptick in the Rightmove house price index and news that a group of Conservative Party backbenchers has demanded a review of the BoE’s independence. Neither of those matters should be market moving.
  • Outgoing BoE Deputy Governor Broadbent will deliver a ‘workshop’ on “New evidence on the Monetary Transmission Mechanism work” this morning, headlines could start to filter out from 10:00 London.
  • Elsewhere, the DMO will hold its quarterly consultation with investors/GEMM.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.079-12.1
Aug-244.958-24.3
Sep-244.862-33.8
Nov-244.742-45.8
Dec-244.655-54.5