STIR: Markets Move To Price Nearly 75bp Of BoE Cuts Through '25

GBP STIRs incrementally more dovish than settlement levels.

• SONIA futures flat to +2.0.
• BoE-dated OIS discounts ~1bp of easing for next month, ~19bp of cuts through February, 27.5bp through March, 50bp through June and 72.5bp through Dec ’25.
• Dec ’25 pricing showed around 60bp of cuts as recently as Wednesday.
• Retail sales data was softer than expected, with the prior month also subjected to negative revisions.
• This is a volatile data series, We don't think there are any notable implications for monetary policy here.
• Flash PMI data is due later this morning, focus on the inflation metrics, particularly on the services side, given still elevated price pressures in that sector.
• Ultimately, we are still of the view that the BoE will deliver 25bp cuts in February and May.
• Markets continue to lean towards this policy path, although don’t fully discount it at this stage.