SONIA Futures Little Changed, 43bp Of '24 BoE Cuts Priced

SONIA futures are -1.0 to +1.0 through the blues, with Bund and gilt futures around the levels seen at the time of Friday’s SONIA settlement window.

• BoE-dated OIS is little changed on the day, showing ~80% odds of a cut through the September MPC and ~43bp of easing through tear end.
• Local headline flow continues to be dominated by polling woes for PM Sunak and the ruling Conservative party.
• Meanwhile, mixed economic data out of China and continued uncertainty surrounding the French political backdrop provide inputs from further afield.
• This week will see focus fall on the latest round of monthly CPI data (Wednesday) and the BoE monetary policy decision (Thursday).
• CPI data may be more informative for the future path of monetary policy than the MPC decision.
• The Bloomberg survey median looks for services CPI to slow to +5.5%Y/Y, still notably above the BoE’s forecast (+5.26%).
• However, we think there may be some downside risks to that releasee.
• We will publish our full previews of those events in due course.