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SONIA Futures Hold Below Settlement Levels, BoE Pricing Shows Just Over 100bp Of '24 Cuts

STIR

Little in terms of bullish counter in SONIA futures, with bounces in core global bond markets remaining shallow for now. That leaves SONIA contracts running 0.25 to 4.5bp lower through the blues, with the greens and blues under the most pressure.

  • ’24 BoE-dated OIS contracts are within 1bp of yesterday’s closing levels after UK CPI and global themes permitted an aggressive hawkish repricing on Wednesday. ~102.5bp of cuts are priced through ’24, with the first 25bp cut fully discounted come the end of the June ’24 MPC.
  • Overnight, RICS house price expectations weren't as soft as feared, but still remained comfortably in negative territory.
  • UK PM Sunak’s Rwanda Bill passed through the commons after a tumultuous couple of days that saw Conservative Party resignations and rebel votes against the bill.
  • The local docket is very limited today.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Feb-245.201+1.3
Mar-245.179-0.9
May-245.064-12.4
Jun-244.915-27.3
Aug-244.701-48.7
Sep-244.520-66.8
Nov-244.315-87.3
Dec-244.162-102.6
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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