UK STIRs See Some Dovish Repricing Early On

SONIA futures run 1-6bp richer through the greens in early trade, with the reds leading on the strip.

• BoE-dated OIS pricing comes in and the strip flattens, with the liquid contracts sitting 2-8bp softer. ~35.5bp of tightening is showing for next week’s BoE, while terminal rate pricing hovers closer to 5.90% after printing around 6.00% at yesterday’s close.
• Reaction to the FOMC decision and a BBG sources piece noting that “advisers to Chancellor of the Exchequer Jeremy Hunt are increasingly concerned that the Bank of England risks raising interest rates too much in the coming months, potentially pushing the UK into an unnecessary recession” are front and centre first thing, with the latest ECB monetary policy decision providing the key risk event of the day.