SONIA Futures Pressured Alongside Wider Core Global FI

Australian CPI data, Fedspeak and weak demand at yesterday’s Tsy auctions have applied further pressure to core global FI markets.

• Bund futures have stabilised in recent trade, while SONIA futures are left flat to 5.0 lower.
• BoE-dated OIS sees slightly less hawkish adjustments on the day. given the differentiation in settlement timing markers between the two markets.
• Those contracts point to ~30bp of ’24 cuts, with a little over 50/50 odds of a cut showing through the Sep MPC.
• UK headline flow remains centred on politics, with Labour looking to promote confidence in its ability to provide a steady pair of hands if the party is victorious at the July 4 election.
• There isn’t any meaningful UK data of note scheduled for today, which will leave focus on macro headline flow and European data.