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SONIA Showing Just Under 50bp Of BoE Cuts For '24

STIR
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GBP STIRs drift further away from post-BoE dovish extremes alongside the downtick in wider core global FI markets.

  • BoE-dated OIS failed to show more than 50bp of ’24 cuts during the post-BoE dovish adjustment, with ~48bp of cuts priced through year end at typing.
  • Pricing for the August MPC currently shows ~56% odds of a cut, while Sep MPC pricing shows ~90% odds of a cut through that juncture, little changed vs. levels seen in the aftermath of today’s dovish BoE outcome.
  • SONIA futures last +1.0 to +6.5 through the blues.
  • SFIZ4 failed to close its May 22 gap lower.
  • SFIZ5 breached its May highs before fading back below.
  • SFIZ6 failed to challenge March highs.
  • Markets will be attentive to post-election BoE rhetoric, looking for clues for trigger points to greenlight cuts from any of the MPC voters that were close to voting for a cut today (if they reveal themselves).
  • Flash PMI data and retail sales headline the UK calendar tomorrow.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Aug-245.060-14.0
Sep-244.975-22.5
Nov-244.820-38.0
Dec-244.720-48.1
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GBP STIRs drift further away from post-BoE dovish extremes alongside the downtick in wider core global FI markets.

  • BoE-dated OIS failed to show more than 50bp of ’24 cuts during the post-BoE dovish adjustment, with ~48bp of cuts priced through year end at typing.
  • Pricing for the August MPC currently shows ~56% odds of a cut, while Sep MPC pricing shows ~90% odds of a cut through that juncture, little changed vs. levels seen in the aftermath of today’s dovish BoE outcome.
  • SONIA futures last +1.0 to +6.5 through the blues.
  • SFIZ4 failed to close its May 22 gap lower.
  • SFIZ5 breached its May highs before fading back below.
  • SFIZ6 failed to challenge March highs.
  • Markets will be attentive to post-election BoE rhetoric, looking for clues for trigger points to greenlight cuts from any of the MPC voters that were close to voting for a cut today (if they reveal themselves).
  • Flash PMI data and retail sales headline the UK calendar tomorrow.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Aug-245.060-14.0
Sep-244.975-22.5
Nov-244.820-38.0
Dec-244.720-48.1