July 15, 2024 06:50 GMT
SONIA Shows Just Under 50bp Of '24 BoE Cuts, Dovish Remains Dovish, Data Eyed
STIR
SONIA futures are +2.5 to -1.5, light twist steepening seen on the strip, with Bunds off lows.
- BoE-dated OIS little changed to ~2bp more dovish through mid-’25 contracts, showing ~11.5bp of cuts for August and ~48.5bp of easing through the Dec MPC.
- BoE dovish dissenter Dhingra unsurprisingly reiterated her push for lower interest rates.
- She told the Rest is Money podcast that “now is the time to start normalising (interest rates) so we can then finally stop squeezing living standards the way we have been to try and get inflation down.”
- She went on to note that “I don't see some kind of consumption boom and if we're going to start moderating from the very high level of interest rate that we are at now...it is going to take some time for that to happen, for us to moderate it as well as for that to then feed into the real economy.”
- Wednesday’s CPI data and Thursday’s labour market report present the highlights of this week’s UK calendar.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Aug-24 | 5.085 | -11.5 |
| Sep-24 | 4.992 | -20.8 |
| Nov-24 | 4.820 | -38.0 |
| Dec-24 | 4.714 | -48.6 |
| Feb-25 | 4.560 | -64.0 |
| Mar-25 | 4.457 | -74.3 |
| May-25 | 4.317 | -88.3 |
| Jun-25 | 4.227 | -97.3 |
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