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SONIA Still Shows ~40bp Of Further '24 Cuts

STIR

Little net movement in SONIA markets today, with broader UK rates rangebound.

  • Futures +2.5 to -1.0.
  • Only option flow of note saw buying of the low delta SFIH5 96.00/96.25/96.50 call ladder, which came in the first couple of hours of trade.
  • BoE-dated OIS shows ~40bp of cuts through year end, essentially unchanged on the day.
  • Flash PMIs due tomorrow, post-election bounce in sentiment to be reassessed.
  • Firmer labour market & inflation components could reduce pricing of further BoE easing through year end.
BoE MeetingSONIA BoE-Dated OIS (%)Difference Vs. Current Effective SONIA Rate (bp)
Sep-244.889-6.2
Nov-244.675-27.5
Dec-244.540-41.0
Feb-254.340-61.0
Mar-254.195-75.5
May-254.036-91.4
Jun-253.942-100.8
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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