The front end of the Sonia curve is steeper...>

SONIA: The front end of the Sonia curve is steeper in early Tuesday morning

trading compared to Monday's close as markets continue to trade with a risk-on

tone, while the Repeal Bill passed its 2nd reading in HoC last night. Looking

ahead the main event today will be UK Aug CPI and PPI data released at 0930GMT.

MNI median forecast is for CPI to rise to 2.7% y/y from 2.6% y/y. Fuel prices is

seen the main reason for the rise in forecasts while some still see pass through

from weaker currency. MNI PINCH now see markets pricing a 57.5% chance of a 25bp

rate hike in Feb 2018 and following levels in BoE forward dated Sonia:-

- Sep-17 0.2bp higher at 0.220%

- Nov-17 0.6bp higher at 0.279%

- Dec-17 0.4bp higher at 0.284%

- Feb-18 0.4bp higher at 0.358%

- Mar-18 0.7bp higher at 0.357%

- May-18 0.7bp higher at 0.406%

- Jun-18 0.8bp higher at 0.406%

- Aug-18 1.0bp higher at 0.435%