SONIA Strip Twist Flattens, BoE OIS Come In After Labour Market Data

SONIA futures have generally paid more attention to uptick in unemployment and jobless claims, as well as the mark lower in payrolled employees, in this morning’s domestic labour market data, as opposed to the firmer than expected wage readings (that were accompanied by positive revisions to prior readings). That leaves the strip running -0.5 to +6.5 ahead of the Gilt open, twist flattening, with terminal rate pricing on the BoE-dated OIS strip softening by ~5bp to last print a little above 6.40% in policy rate terms. That limits the bid in GBP, which was linked to the firm wage data, allowing cable to move back below $1.2900.