STIR: Markets Price Over 16bp Of Easing For Dec BoE, Saporta Comments Eyed

Modest hawkish adjustments seen in GBP STIRs as benchmark global equity indices recover from Asia lows and bonds soften.

• That leaves October dovish extremes in the likes of SFIZ6, SFIZ5/Z6 spread and GBP 1y1y unchallenged.
• SONIA futures flat to -1.5, as the relatively contained reaction to yesterday’s dovish hold from the BoE starts to fade.
• BoE-dated OIS showing 16.5bp of easing for next month, 27.5bp through February and 34bp through March, contracts little changed to ~0.5bp less dovish on the day.
• Our detailed BoE review, complete with post-meeting adjustments in sell-side calls, will be released later today.
• BoE chief economist Pill will speak this afternoon (15:15 London).
• Comments from BoE Executive Director for Markets Saporta (11:10 London) will be closely eyed given the recent swings in RONIA. We have noted that yesterday’s spike higher in the rate was likely driven by a lower-than-expected STR take-up.
• We are still around GBP100bln above the top of the Bank's estimates of PMRR - which suggests that we won't move from an "excess" to more "ample" reserves level for around a year (or possibly longer if repo operation usage keeps increasing).
• See recent bullets for further detail.