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SONIA Futures Off Services CPI-Inspired Lows, A Little Over 40bp Of '24 BoE Cuts Priced

STIR
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The firmer-than-expected UK services CPI reading initially applies light pressure to GBP STIRs.

  • SONIA futures are -3.5 to +1.5 through the blues.
  • The strip twist flattens.
  • Contracts have ticked away from opening lows, with the remainder of the inflation readings in line to a little below expectations.
  • ’24 BoE-dated OIS contracts see some hawkish adjustments, moving 1-4bp higher vs. yesterday’s closing levels.
  • ~41bp of cuts are now priced through year-end vs. ~45bp late yesterday.
  • The data presents a hawkish outcome for services CPI vs. BoE forecasts, which will factor into MPC discussions in the run up to tomorrow’s monetary policy decision.
  • Our full preview of that event can be found here.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.209+0.9
Aug-245.117-8.3
Sep-245.032-16.9
Nov-244.898-30.3
Dec-244.793-40.7
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The firmer-than-expected UK services CPI reading initially applies light pressure to GBP STIRs.

  • SONIA futures are -3.5 to +1.5 through the blues.
  • The strip twist flattens.
  • Contracts have ticked away from opening lows, with the remainder of the inflation readings in line to a little below expectations.
  • ’24 BoE-dated OIS contracts see some hawkish adjustments, moving 1-4bp higher vs. yesterday’s closing levels.
  • ~41bp of cuts are now priced through year-end vs. ~45bp late yesterday.
  • The data presents a hawkish outcome for services CPI vs. BoE forecasts, which will factor into MPC discussions in the run up to tomorrow’s monetary policy decision.
  • Our full preview of that event can be found here.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Jun-245.209+0.9
Aug-245.117-8.3
Sep-245.032-16.9
Nov-244.898-30.3
Dec-244.793-40.7