June 03, 2024 06:50 GMT
SONIA Futures Little Changed, Just Over 30bp Of '24 BoE Cuts Priced
STIR
SONIA futures are -1.0 to +1.0 through the blues, with a light twist flattening bias.
- BoE-dated OIS is little changed to 1bp softer, showing a little over 50/50 odds of a cut through the Sep MPC and ~31.5 of cuts through year end, holding within the hawkish end of the recent range, but off extremes.
- Core global FI markets seem to have stabilised after Friday’s late pressure, with TY and Bund futures back towards Friday’s best levels.
- Headline flow was scarce during Friday's pullback.
- Pre-election political posturing continues to dominate UK news flow, with most BoE appearances cancelled through the July 4 election (policy meetings will take place as scheduled).
- A reminder that late Friday saw the Citi/YouGov year ahead inflation expectations metric moderate to +3.1%, representing the lowest level since July 2021. Longer run inflation expectations also fell, hitting the joint lowest level seen since March ’21.
- Final UK manufacturing PMI data is due today.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Jun-24 | 5.200 | +0.0 |
Aug-24 | 5.124 | -7.6 |
Sep-24 | 5.066 | -13.4 |
Nov-24 | 4.956 | -24.4 |
Dec-24 | 4.884 | -31.6 |
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