BASIC INDUSTRIES: Norsk Hydro (NHYNO Baa2/BBB/NR): 4Q24 Results

ERM5 97.62/97.75/97.87c fly, bought for 2.25 in 8.88k

• MNI: FRANCE DEC HICP 0.2% M/M, 1.8% Y/Y
• FRANCE DEC CPI 0.2% M/M, 1.3% Y/Y

Dovish moves in GBP STIRs following the softer-than-expected CPI data

• BoE-dated OIS moves to price 48bp of cuts through year-end vs. ~36.5bp seen late yesterday (the latter represented a fresh cycle extreme).
• Next 25bp cut once again more-than-fully discounted through the end of the May MPC
• SONIA futures 2.5-10.0 higher, with the late whites & reds leading the move.
• A reminder that some of the more volatile components within the CPI data drove the downside surprise, although the market hasn’t taken much notice of this and is unwinding some of the aggressive hawkish repricing seen in recent sessions.
• BoE dovish dissenter Taylor will speak later (16:30 London).
• It will be interesting to see whether Taylor explicitly addresses the change in market prices, given the moves since the release of the BoE's MPR forecasts.
• The views of the three dissenters in the December MPC Minutes described the "sluggish demand and a weakening labour market, now and in the year ahead, both of which would see further downward pressure on demand, wages, and prices." And noted that "given the evolving balance of risks, a less restrictive policy rate was warranted" in the view of the three dissenting members.