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SONIA Futures Lower Alongside Peers, 41bp Of ’24 BoE Cuts Priced

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

Some weakness in the long end of core global FI markets (driven by IG$ supply and the removal of some of last week’s French political risk premium) weighs on SONIA futures today, leaving contracts flat to -5.5 through the blues.

  • SFIZ4 failed to close its May 22 gap lower during last week’s rally, while SFIZ5 failed to breach its May highs, leaving recent ranges intact in those contracts.
  • BoE-dated OIS shows little changed to 2bp firmer (less dovish) on the day across ’24 meetings, with ~18bp of easing priced through the Sep MPC and ~41bp of cuts priced through year end.
  • Wednesday’s CPI data and Thursday’s BoE decision present the key UK risk events this week.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.206+0.6
Aug-245.099-10.1
Sep-245.021-17.9
Nov-244.892-30.8
Dec-244.790-41.0
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Some weakness in the long end of core global FI markets (driven by IG$ supply and the removal of some of last week’s French political risk premium) weighs on SONIA futures today, leaving contracts flat to -5.5 through the blues.

  • SFIZ4 failed to close its May 22 gap lower during last week’s rally, while SFIZ5 failed to breach its May highs, leaving recent ranges intact in those contracts.
  • BoE-dated OIS shows little changed to 2bp firmer (less dovish) on the day across ’24 meetings, with ~18bp of easing priced through the Sep MPC and ~41bp of cuts priced through year end.
  • Wednesday’s CPI data and Thursday’s BoE decision present the key UK risk events this week.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.206+0.6
Aug-245.099-10.1
Sep-245.021-17.9
Nov-244.892-30.8
Dec-244.790-41.0