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SONIA Futures Under Light Pressure

STIR

SONIA futures are flat to -4.5 through the blues, under light pressure early this week.

  • BoE-dated OIS shows ~63bp of cuts for ’24, with ~24bp of easing priced through the end of the June ’24 MPC. ’24 contracts are little changed to 2.5bp firmer.
  • Core global FI markets are off Friday’s highs, with some overnight focus on Japan officially recognising the end of deflation in the coming months.
  • Elsewhere, domestic headline flow continues to be dominated by pre-Budget speculation.
  • Weekend comments from Chancellor Hunt pointed to a “responsible” approach to fiscal easing.
  • Local press source reports are seemingly biased towards slightly larger tax/national insurance cuts than they were 1 week ago.
  • This will be applying some modest pressure to the SONIA strip.
  • The local release & speaker calendar is empty on Monday, with focus centred on fiscal speculation ahead of Wednesday’s Budget.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Mar-245.201+1.2
May-245.165-2.4
Jun-245.082-10.7
Aug-244.946-24.3
Sep-244.829-36.0
Nov-244.676-51.3
Dec-244.560-62.9
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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