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SONIA Sees Slightly Hawkish Reaction To BoE's Pill, Aug BoE Cut No Longer fully Discounted

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

A modest hawkish reaction to comments from BoE chief economist Pill, who seems to be in no rush to cut rates (see previous bullets for further colour on his speech).

  • SONIA futures generally look through/test early session lows, last 1.0-5.5bp lower, with the reds under the most pressure.
  • BoE-dated OIS moves to price ~53bp of ‘24 cuts vs. ~57bp pre-Pill.
  • Market pricing covering the August MPC slips just below fully discounting a 25bp cut through that juncture.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.195-0.4
Jun-245.087-11.3
Aug-244.961-23.8
Sep-244.872-32.8
Nov-244.753-44.7
Dec-244.667-53.2
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A modest hawkish reaction to comments from BoE chief economist Pill, who seems to be in no rush to cut rates (see previous bullets for further colour on his speech).

  • SONIA futures generally look through/test early session lows, last 1.0-5.5bp lower, with the reds under the most pressure.
  • BoE-dated OIS moves to price ~53bp of ‘24 cuts vs. ~57bp pre-Pill.
  • Market pricing covering the August MPC slips just below fully discounting a 25bp cut through that juncture.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
May-245.195-0.4
Jun-245.087-11.3
Aug-244.961-23.8
Sep-244.872-32.8
Nov-244.753-44.7
Dec-244.667-53.2