STIR: 60bp Of BoE Cuts Priced Through December, Macro Cues Eyed
GBP STIRs little changed to a touch more hawkish vs. late Thursday levels, with Tsy and Bund futures sticking to narrow ranges overnight and little UK news to note.
- BoE-dated OIS shows ~60bp of cuts through year-end.
- Markets didn’t quite manage to fully discount 3 further 25bp cuts through year-end during the initial dovish reaction to yesterday’s BoE decision & vote split, with hawkish caveats and CPI expectations subsequently pulling the space away from yesterday’s most dovish levels.
- The next 25bp cut is fully discounted through the May MPC decision.
- SONIA futures flat to -4.0.
- Domestic focus will fall on comments from BoE chief economist Pill (12:15 London), as he briefs on yesterday’s monetary policy decision.
- Macro inputs of note include the ECB’s latest study on r* and the monthly U.S. NFP release.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Cut-Adjusted SONIA Rate (bp) |
Mar-25 | 4.398 | -5.7 |
May-25 | 4.205 | -25.0 |
Jun-25 | 4.119 | -33.6 |
Aug-25 | 3.981 | -47.4 |
Sep-25 | 3.942 | -51.2 |
Nov-25 | 3.871 | -58.4 |
Dec-25 | 3.857 | -59.7 |
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STIR: 57bp Of BoE Cuts Priced Through '25
GBP STIRs little changed to a touch more dovish given the tick away from yesterday’s lows in core global FI markets.
- BoE-dated OIS flat to 1bp more dovish across ’25 contracts. 57bp of cuts priced through year-end, with ~17bp of cuts priced for February, ~21bp of cuts priced through March and ~33bp of easing showing through May.
- SONIA futures little changed to +2.0. Dec lows still untested through SFIU7.
- Little of note on the UK data calendar today, meaning focus will be centred on the long end and U.S. data.
- There is a busier schedule tomorrow, with the BoE DMP, S&P-KPMG-REC report on jobs and comments from BoE’s Breeden due.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Feb-25 | 4.521 | -17.9 |
Mar-25 | 4.487 | -21.3 |
May-25 | 4.371 | -32.9 |
Jun-25 | 4.330 | -37.0 |
Aug-25 | 4.238 | -46.2 |
Sep-25 | 4.211 | -49.0 |
Nov-25 | 4.153 | -54.8 |
Dec-25 | 4.131 | -56.9 |
MNI: FRANCE DEC CONSUMER SENTIMENT 89
- MNI: FRANCE DEC CONSUMER SENTIMENT 89
UK DMO UPDATE: Syndication Announcement
The DMO "announces that the sixth transaction of the 2024-25 syndication programme will be a re-opening of 4 3/8% Treasury Gilt 2040" (ISIN: GB00BQC82D08).
- Transaction planned to take place w/c January 20 "subject to demand and market conditions".
