STIR: PMIs Key To August BoE Pricing

SONIA futures are flat to 3.0 ticks higher through the blues alongside Euribor counterparts. BoE implied rates remain within recent ranges ahead of the widely anticipated flash PMI release at 0930BST this morning.

• With August pricing on a knife-edge (BoE-dated OIS price 9bps of easing through the meeting), the PMIs are the last tier 1 data input before next Thursday’s decision.
• Price components will be the key focus, particularly the extent to which firms are able to pass-on costs to end consumers.
• In June, the services PMI noted that “cost pressures continued to cool, but remained elevated. The rate of output price inflation accelerated slightly from May's recent low, however."
• Overnight, the Brightmine HR wage data showed the median basic pay award in the 3-months to June rise 4.9% Y/Y (unchanged from the previous rolling quarter’s revised figure). 
• Yesterday, new BoE Executive Director for Markets, Vicky Saporta, noted that recent increases in the STR facility has been “welcomed” (in line with communication from Dave Ramsden at the May BoE press conference). 
• A reminder that the BoE MPC is in its pre-meeting quiet period ahead of the August 1 meeting.