[et_pb_section fb_built=”1″ _builder_version=”4.16″ custom_margin=”-111px|||||” custom_padding=”10px||0px|||” global_colors_info=”{}”][et_pb_row column_structure=”1_2,1_2″ _builder_version=”4.16″ background_color=”rgba(0,0,0,0.03)” min_height=”51px” custom_margin=”15px||5px||false|false” custom_margin_tablet=”” custom_margin_phone=”” custom_margin_last_edited=”on|tablet” custom_padding=”10px|10px|10px|10px|false|false” box_shadow_style=”preset1″ box_shadow_vertical=”0px” box_shadow_blur=”5px” box_shadow_color=”#0099cc” global_colors_info=”{}”][et_pb_column type=”1_2″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_text content_tablet=”
Understanding SONIA Outlook and Hedge Strategy
” content_phone=”
Understanding SONIA Outlook and Hedge Strategy
” content_last_edited=”on|phone” _builder_version=”4.20.0″ text_font=”Open Sans||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”Open Sans|700|||||||” header_text_color=”#000000″ header_font_size=”42px” header_line_height=”1.3em” header_2_font=”|700|||||||” header_2_font_size=”30px” header_2_line_height=”1.5em” custom_margin=”||10px||false|false” custom_padding=”||||false|false” header_font_size_tablet=”36px” header_font_size_phone=”32px” header_font_size_last_edited=”on|tablet” locked=”off” global_colors_info=”{}”]
Understanding SONIA Outlook and Hedge Strategy
[/et_pb_text][et_pb_text _builder_version=”4.20.0″ _module_preset=”default” text_font=”Open Sans||||||||” text_text_color=”#0c71c3″ text_font_size=”16px” text_line_height=”1.8em” ol_line_height=”2em” header_font=”Open Sans||||||||” header_line_height=”1.8em” header_2_font=”Open Sans||||||||” header_2_text_color=”#000000″ header_2_font_size=”32px” header_2_line_height=”1.5em” custom_margin=”||1px|||” custom_padding=”0px||0px|||” text_font_size_tablet=”” text_font_size_phone=”” text_font_size_last_edited=”on|tablet” text_line_height_tablet=”” text_line_height_phone=”1.8em” text_line_height_last_edited=”on|phone” header_2_font_size_tablet=”28px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]
Published on: 28th February 2023
[/et_pb_text][/et_pb_column][et_pb_column type=”1_2″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_image src=”https://lightpink-wombat-703347.hostingersite.com/wp-content/uploads/2023/02/sonia-forecast.jpg” alt=”Best Hedging Strategy For Importers, import port” title_text=”sonia forecast” align=”center” _builder_version=”4.20.0″ _module_preset=”default” custom_padding=”||||false|false” global_colors_info=”{}”][/et_pb_image][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text content_tablet=”
The sterling overnight index average, also known as SONIA, is the effective overnight interest rate that banks pay for unsecure trades in the British sterling market. As a benchmark interest rate for short-term financial transactions, it offers traders and financial organisations a substitute for the London Interbank Offered Rate, or LIBOR.
” content_phone=”
The sterling overnight index average, also known as SONIA, is the effective overnight interest rate that banks pay for unsecure trades in the British sterling market. As a benchmark interest rate for short-term financial transactions, it offers traders and financial organisations a substitute for the London Interbank Offered Rate, or LIBOR.
” content_last_edited=”on|phone” _builder_version=”4.20.0″ _module_preset=”default” text_text_color=”#282828″ text_font_size=”18px” text_line_height=”1.8em” text_orientation=”justified” hover_enabled=”0″ text_font_size_tablet=”18px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” text_orientation_tablet=”justified” text_orientation_phone=”justified” text_orientation_last_edited=”on|phone” border_color_all=”RGBA(0,0,0,0)” global_colors_info=”{}” sticky_enabled=”0″]
The sterling overnight index average, also known as SONIA, is the effective overnight interest rate that banks pay for unsecure trades in the British sterling market. As a benchmark interest rate for short-term financial transactions, it offers traders and financial organisations a substitute for the London Interbank Offered Rate, or LIBOR.
[/et_pb_text][et_pb_text content_tablet=”
SONIA Forecast: A Cautious Approach to Further Rate Hikes
” content_phone=”
SONIA Forecast: A Cautious Approach to Further Rate Hikes
” content_last_edited=”on|phone” _builder_version=”4.20.0″ _module_preset=”default” text_text_color=”#282828″ text_font_size=”18px” text_line_height=”1.8em” header_2_line_height=”1.3em” text_orientation=”justified” text_font_size_tablet=”18px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|phone” text_orientation_tablet=”justified” text_orientation_phone=”justified” text_orientation_last_edited=”on|phone” border_color_all=”RGBA(0,0,0,0)” global_colors_info=”{}”]
SONIA Forecast: A Cautious Approach to Further Rate Hikes
[/et_pb_text][et_pb_text content_tablet=”
The current outlook for SONIA interest rates in the UK suggests that while inflation has peaked, it remains in double digits. As a result, the Bank of England has cautiously increased rates by 50 bps in its latest meeting, bringing the rate to 4% in February 2023 from 0.75% in May 2022. While further rate hikes may be necessary if persistent inflationary pressures are observed, it is unlikely that they will be aggressive.
” content_phone=”
The current outlook for SONIA interest rates in the UK suggests that while inflation has peaked, it remains in double digits. As a result, the Bank of England has cautiously increased rates by 50 bps in its latest meeting, bringing the rate to 4% in February 2023 from 0.75% in May 2022. While further rate hikes may be necessary if persistent inflationary pressures are observed, it is unlikely that they will be aggressive.
” content_last_edited=”on|phone” _builder_version=”4.20.0″ _module_preset=”default” text_text_color=”#282828″ text_font_size=”18px” text_line_height=”1.8em” text_orientation=”justified” text_font_size_tablet=”18px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” text_orientation_tablet=”justified” text_orientation_phone=”justified” text_orientation_last_edited=”on|phone” border_color_all=”RGBA(0,0,0,0)” global_colors_info=”{}”]
The current outlook for SONIA interest rates in the UK suggests that while inflation has peaked, it remains in double digits. As a result, the Bank of England has cautiously increased rates by 50 bps in its latest meeting, bringing the rate to 4% in February 2023 from 0.75% in May 2022. While further rate hikes may be necessary if persistent inflationary pressures are observed, it is unlikely that they will be aggressive.
[/et_pb_text][et_pb_image src=”https://lightpink-wombat-703347.hostingersite.com/wp-content/uploads/2023/02/uk-inlfation-rate-sonia.png” title_text=”uk inlfation rate sonia” align=”center” _builder_version=”4.20.0″ _module_preset=”default” global_colors_info=”{}”][/et_pb_image][et_pb_text content_tablet=”
Sonia Hedge Strategy: Prudent Approach for Longer Tenors
” content_phone=”
Sonia Hedge Strategy: Prudent Approach for Longer Tenors
” content_last_edited=”on|phone” _builder_version=”4.20.0″ _module_preset=”default” text_text_color=”#282828″ text_font_size=”18px” text_line_height=”1.8em” header_line_height=”1.2em” header_2_line_height=”1.3em” text_orientation=”justified” text_font_size_tablet=”18px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|phone” header_2_line_height_tablet=”1.3em” header_2_line_height_phone=”1.5em” header_2_line_height_last_edited=”on|phone” text_orientation_tablet=”justified” text_orientation_phone=”justified” text_orientation_last_edited=”on|phone” border_color_all=”RGBA(0,0,0,0)” global_colors_info=”{}”]
SONIA Hedge Strategy: Prudent Approach for Longer Tenors
[/et_pb_text][et_pb_text content_tablet=”
The above forecast suggests that it may not make sense for companies to aggressively hedge their exposure to SONIA interest rates. However, a SONIA hedge strategy could still be prudent, particularly for longer tenors where hedge rates are lower. One option could be to use an IRS to hedge a portion of the exposure, such as 40%, and leave the remaining 60% unhedged to benefit from potential rate declines.
” content_phone=”
The above forecast suggests that it may not make sense for companies to aggressively hedge their exposure to SONIA interest rates. However, a SONIA hedge strategy could still be prudent, particularly for longer tenors where hedge rates are lower. One option could be to use an IRS to hedge a portion of the exposure, such as 40%, and leave the remaining 60% unhedged to benefit from potential rate declines.
” content_last_edited=”on|phone” _builder_version=”4.20.0″ _module_preset=”default” text_text_color=”#282828″ text_font_size=”18px” text_line_height=”1.8em” text_orientation=”justified” text_font_size_tablet=”18px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” text_orientation_tablet=”justified” text_orientation_phone=”justified” text_orientation_last_edited=”on|phone” border_color_all=”RGBA(0,0,0,0)” global_colors_info=”{}”]
The above forecast suggests that it may not make sense for companies to aggressively hedge their exposure to SONIA interest rates. However, a SONIA hedge strategy could still be prudent, particularly for longer tenors where hedge rates are lower. One option could be to use an IRS to hedge a portion of the exposure, such as 40%, and leave the remaining 60% unhedged to benefit from potential rate declines.
[/et_pb_text][et_pb_text content_tablet=”
Analyzing the SONIA Rate Chart and Curve
” content_phone=”
Analyzing the SONIA Rate Chart and Curve
” content_last_edited=”on|phone” _builder_version=”4.20.0″ _module_preset=”default” text_text_color=”#282828″ text_font_size=”18px” text_line_height=”1.8em” header_2_font_size=”27px” text_orientation=”justified” text_font_size_tablet=”18px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”27px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|phone” header_2_line_height_tablet=”” header_2_line_height_phone=”1.3em” header_2_line_height_last_edited=”on|phone” text_orientation_tablet=”justified” text_orientation_phone=”justified” text_orientation_last_edited=”on|phone” border_color_all=”RGBA(0,0,0,0)” global_colors_info=”{}”]
Analyzing the SONIA Rate Chart and Curve
[/et_pb_text][et_pb_text content_tablet=”
When considering the SONIA rate chart, it’s important to note that the Sonia 3-month rate and the SONIA 1-month rate have both increased since the peak in October 2022, but have since moderated to 10.1%. The SONIA rate curve may indicate a need for continued monitoring of inflationary pressures, as the Bank of England has suggested in its latest statement.
” content_phone=”
When considering the SONIA rate chart, it’s important to note that the Sonia 3-month rate and the SONIA 1-month rate have both increased since the peak in October 2022, but have since moderated to 10.1%. The SONIA rate curve may indicate a need for continued monitoring of inflationary pressures, as the Bank of England has suggested in its latest statement.
” content_last_edited=”on|phone” _builder_version=”4.20.0″ _module_preset=”default” text_text_color=”#282828″ text_font_size=”18px” text_line_height=”1.8em” text_orientation=”justified” text_font_size_tablet=”18px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” text_orientation_tablet=”justified” text_orientation_phone=”justified” text_orientation_last_edited=”on|phone” border_color_all=”RGBA(0,0,0,0)” global_colors_info=”{}”]
When considering the SONIA rate chart, it’s important to note that the Sonia 3-month rate and the SONIA 1-month rate have both increased since the peak in October 2022, but have since moderated to 10.1%. The SONIA rate curve may indicate a need for continued monitoring of inflationary pressures, as the Bank of England has suggested in its latest statement.
[/et_pb_text][et_pb_image src=”https://lightpink-wombat-703347.hostingersite.com/wp-content/uploads/2023/02/quaterly-sonia-fra.png” title_text=”quaterly sonia fra” align=”center” _builder_version=”4.20.0″ _module_preset=”default” global_colors_info=”{}”][/et_pb_image][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_row column_structure=”1_2,1_2″ disabled_on=”off|off|off” module_id=”Regform” _builder_version=”4.16″ background_color=”#FFFFFF” background_enable_image=”off” background_blend=”overlay” width=”auto” custom_margin=”||||false|false” custom_padding=”46px|5%|15px|5%|false|false” box_shadow_style=”preset2″ locked=”off” global_colors_info=”{}”][et_pb_column type=”1_2″ module_id=”getstarted” _builder_version=”4.16″ background_enable_color=”off” custom_padding_tablet=”” custom_padding_phone=”|1px||1px|false|false” custom_padding_last_edited=”on|phone” global_colors_info=”{}”][et_pb_text _builder_version=”4.16″ _module_preset=”default” text_font=”Roboto Condensed|700|||||||” text_text_color=”#000000″ text_font_size=”20px” text_line_height=”1.3em” header_font=”Roboto Condensed|700|||||||” header_font_size=”49px” header_4_font=”Roboto Condensed|700|||||||” header_4_text_color=”#000000″ header_4_font_size=”50px” header_4_letter_spacing=”1px” text_orientation=”center” custom_margin=”59px|||||” custom_margin_tablet=”” custom_margin_phone=”0px||0px||false|false” custom_margin_last_edited=”on|phone” custom_padding=”|1%||1%|false|false” header_font_size_tablet=”” header_font_size_phone=”35px” header_font_size_last_edited=”on|desktop” global_colors_info=”{}”]
Schedule a 15-20 min call with us
Write to Us:
Call us:
[/et_pb_text][/et_pb_column][et_pb_column type=”1_2″ _builder_version=”4.16″ _module_preset=”default” custom_padding=”||||false|false” custom_padding_tablet=”” custom_padding_phone=”|1px||1px|false|false” custom_padding_last_edited=”on|phone” global_colors_info=”{}”][et_pb_contact_form use_spam_service=”on” recaptcha_list=”QuantArt Hedgenius Form-0″ email=”[email protected], [email protected]” custom_message=”LIBOR to SOFR Page||et_pb_line_break_holder||Name: %%Name%%||et_pb_line_break_holder||Company name: %%Company%%||et_pb_line_break_holder||Phone Number: %%Phone_Number%%||et_pb_line_break_holder||Email: %%Email_Id%%||et_pb_line_break_holder||Please mention topics of Interest (optional) :%%Topic_of_Interest%%||et_pb_line_break_holder||” use_redirect=”on” redirect_url=”https://lightpink-wombat-703347.hostingersite.com/thank-you-blog-submission/” success_message=”.” submit_button_text=”Sign up” disabled_on=”off|off|off” _builder_version=”4.19.0″ _unique_id=”3a7e8f3a-8dcb-4374-aa00-30cf9362ff1c” form_field_text_color=”#a8a8a8″ title_font=”|600|||||||” title_text_align=”center” title_font_size=”29px” title_line_height=”1.3em” form_field_font_size=”14px” background_enable_color=”off” custom_button=”on” button_text_color=”#ffffff” button_bg_color=”#184168″ button_bg_color_gradient_stops=”#b57624 0%|#29c4a9 100%” button_bg_color_gradient_start=”#b57624″ button_border_width=”0px” button_border_color=”#2879bd” button_border_radius=”6px” button_font=”Open Sans|600|||||||” button_use_icon=”off” button_custom_margin_tablet=”” button_custom_margin_phone=”18px||||false|false” button_custom_margin_last_edited=”on|phone” button_custom_padding=”||||false|false” width=”100%” max_width=”100%” custom_margin=”||||false|false” custom_padding=”||||false|false” title_font_size_tablet=”” title_font_size_phone=”20px” title_font_size_last_edited=”on|phone” form_field_font_size_tablet=”” form_field_font_size_phone=”14px” form_field_font_size_last_edited=”on|phone” box_shadow_style_button=”preset2″ global_colors_info=”{}” form_field_text_color__hover_enabled=”on|hover” form_field_text_color__hover=”#a8a8a8″][et_pb_contact_field field_id=”Name” field_title=”Name” fullwidth_field=”on” _builder_version=”4.16″ form_field_background_color=”#e3e3e8″ form_field_text_color=”#000000″ form_field_font=”Open Sans||||||||” form_field_font_size=”18px” text_orientation=”center” border_radii=”on|7px|7px|7px|7px” border_style_all=”none” global_colors_info=”{}” button_text_size__hover_enabled=”off” button_one_text_size__hover_enabled=”off” button_two_text_size__hover_enabled=”off” button_text_color__hover_enabled=”off” button_one_text_color__hover_enabled=”off” button_two_text_color__hover_enabled=”off” button_border_width__hover_enabled=”off” button_one_border_width__hover_enabled=”off” button_two_border_width__hover_enabled=”off” button_border_color__hover_enabled=”off” button_one_border_color__hover_enabled=”off” button_two_border_color__hover_enabled=”off” button_border_radius__hover_enabled=”off” button_one_border_radius__hover_enabled=”off” button_two_border_radius__hover_enabled=”off” button_letter_spacing__hover_enabled=”off” button_one_letter_spacing__hover_enabled=”off” button_two_letter_spacing__hover_enabled=”off” button_bg_color__hover_enabled=”off” button_one_bg_color__hover_enabled=”off” button_two_bg_color__hover_enabled=”off”][/et_pb_contact_field][et_pb_contact_field field_id=”Company” field_title=”Company Name” fullwidth_field=”on” _builder_version=”4.16″ form_field_background_color=”#e3e3e8″ form_field_text_color=”#000000″ form_field_font=”Open Sans||||||||” form_field_font_size=”18px” text_orientation=”center” border_radii=”on|7px|7px|7px|7px” border_style_all=”none” global_colors_info=”{}” button_text_size__hover_enabled=”off” button_one_text_size__hover_enabled=”off” button_two_text_size__hover_enabled=”off” button_text_color__hover_enabled=”off” button_one_text_color__hover_enabled=”off” button_two_text_color__hover_enabled=”off” button_border_width__hover_enabled=”off” button_one_border_width__hover_enabled=”off” button_two_border_width__hover_enabled=”off” button_border_color__hover_enabled=”off” button_one_border_color__hover_enabled=”off” button_two_border_color__hover_enabled=”off” button_border_radius__hover_enabled=”off” button_one_border_radius__hover_enabled=”off” button_two_border_radius__hover_enabled=”off” button_letter_spacing__hover_enabled=”off” button_one_letter_spacing__hover_enabled=”off” button_two_letter_spacing__hover_enabled=”off” button_bg_color__hover_enabled=”off” button_one_bg_color__hover_enabled=”off” button_two_bg_color__hover_enabled=”off”][/et_pb_contact_field][et_pb_contact_field field_id=”Phone_Number” field_title=”Phone Number ” fullwidth_field=”on” _builder_version=”4.16″ form_field_background_color=”#e3e3e8″ form_field_text_color=”#000000″ form_field_font=”Open Sans||||||||” form_field_font_size=”18px” text_orientation=”center” border_radii=”on|7px|7px|7px|7px” border_style_all=”none” global_colors_info=”{}” button_text_size__hover_enabled=”off” button_one_text_size__hover_enabled=”off” button_two_text_size__hover_enabled=”off” button_text_color__hover_enabled=”off” button_one_text_color__hover_enabled=”off” button_two_text_color__hover_enabled=”off” button_border_width__hover_enabled=”off” button_one_border_width__hover_enabled=”off” button_two_border_width__hover_enabled=”off” button_border_color__hover_enabled=”off” button_one_border_color__hover_enabled=”off” button_two_border_color__hover_enabled=”off” button_border_radius__hover_enabled=”off” button_one_border_radius__hover_enabled=”off” button_two_border_radius__hover_enabled=”off” button_letter_spacing__hover_enabled=”off” button_one_letter_spacing__hover_enabled=”off” button_two_letter_spacing__hover_enabled=”off” button_bg_color__hover_enabled=”off” button_one_bg_color__hover_enabled=”off” button_two_bg_color__hover_enabled=”off”][/et_pb_contact_field][et_pb_contact_field field_id=”Email_Id” field_title=”Official Email” field_type=”email” fullwidth_field=”on” _builder_version=”4.16″ form_field_background_color=”#e3e3e8″ form_field_text_color=”#000000″ form_field_font=”Open Sans||||||||” form_field_font_size=”18px” text_orientation=”center” border_radii=”on|7px|7px|7px|7px” border_style_all=”none” global_colors_info=”{}” button_text_size__hover_enabled=”off” button_one_text_size__hover_enabled=”off” button_two_text_size__hover_enabled=”off” button_text_color__hover_enabled=”off” button_one_text_color__hover_enabled=”off” button_two_text_color__hover_enabled=”off” button_border_width__hover_enabled=”off” button_one_border_width__hover_enabled=”off” button_two_border_width__hover_enabled=”off” button_border_color__hover_enabled=”off” button_one_border_color__hover_enabled=”off” button_two_border_color__hover_enabled=”off” button_border_radius__hover_enabled=”off” button_one_border_radius__hover_enabled=”off” button_two_border_radius__hover_enabled=”off” button_letter_spacing__hover_enabled=”off” button_one_letter_spacing__hover_enabled=”off” button_two_letter_spacing__hover_enabled=”off” button_bg_color__hover_enabled=”off” button_one_bg_color__hover_enabled=”off” button_two_bg_color__hover_enabled=”off”][/et_pb_contact_field][et_pb_contact_field field_id=”Topic_of_Interest” field_title=”Your Requirement” field_type=”text” required_mark=”off” fullwidth_field=”on” _builder_version=”4.19.0″ form_field_background_color=”#e3e3e8″ form_field_text_color=”#000000″ form_field_font=”Open Sans||||||||” form_field_font_size=”18px” text_orientation=”center” border_radii=”on|7px|7px|7px|7px” border_style_all=”none” global_colors_info=”{}” button_text_size__hover_enabled=”off” button_one_text_size__hover_enabled=”off” button_two_text_size__hover_enabled=”off” button_text_color__hover_enabled=”off” button_one_text_color__hover_enabled=”off” button_two_text_color__hover_enabled=”off” button_border_width__hover_enabled=”off” button_one_border_width__hover_enabled=”off” button_two_border_width__hover_enabled=”off” button_border_color__hover_enabled=”off” button_one_border_color__hover_enabled=”off” button_two_border_color__hover_enabled=”off” button_border_radius__hover_enabled=”off” button_one_border_radius__hover_enabled=”off” button_two_border_radius__hover_enabled=”off” button_letter_spacing__hover_enabled=”off” button_one_letter_spacing__hover_enabled=”off” button_two_letter_spacing__hover_enabled=”off” button_bg_color__hover_enabled=”off” button_one_bg_color__hover_enabled=”off” button_two_bg_color__hover_enabled=”off”][/et_pb_contact_field][/et_pb_contact_form][/et_pb_column][/et_pb_row][/et_pb_section]