SONIA Holds Late Wednesday Moves, Local Survey Data Eyed

SONIA futures generally hold their post-settlement rally, unchanged to +3.5 through the blues after wider core global FI markets rallied a little on Fed Chair Powell’s late Wednesday comments.

• BoE-dated OIS contracts are also in line with late Wednesday levels, showing ~71.5bp of cuts through year end. Further forward, ~17.5bp of cuts are priced through the June MPC, with recent ranges intact.
• The BoE DMP survey headlines the UK calendar today.
• The wage and inflation components will continue to receive the most interest, given feedthrough into BoE policy.
• Final services PMI data is also due.
• Those with a dovish leaning may use any hawkish reaction to those surveys to enter received/flattener positions, particularly if we get closer to range extremes.