SONIA Futures Firm, With An Eye On ECB Speak & Geopolitics

The combination of heightened geopolitical tensions surrounding the Middle East (see earlier oil bullets for details) and dovish ECB speak from Villeroy over the weekend allows the SONIA futures strip to firm early on Monday. Core global bond futures are generally a little above levels seen at the time of Friday’s SONIA Settlement.

• Contracts through the blues run flat to 6.0bp firmer, with the reds and greens leading that move.
• ’24 BoE-dated OIS is little changed to ~3.5bp softer through ’24 contracts, showing ~108bp of cuts through the year, with the first full 25bp cut fully discounted come the end of the June ’24 gathering.
• Political jousting and fiscal easing speculation (the potential for further National Insurance cuts was flagged in source reports over the weekend) continued to dominate local news feeds.
• Thursday’s BoE decision headlines the domestic docket this week (expect our full preview to cross on Tuesday). While expectations are for no change in the policy rate focus will fall on the Bank’s updated economic projections, guidance verse, details of the policy debate in the minutes and the vote spit.