Sonia swaps surge not mirrored by futures

Popularity of short sterling futures takes shine off Sonia’s RFR succession

January’s surge in Sonia swaps trading may signal accelerating adoption of the sterling market’s alternative risk-free rate, just as UK regulators make another push to drive the market off Libor.

But the activity also highlighted the market’s continued reliance on a separate Libor product: so-called short sterling futures.

These three-month Intercontinental Exchange contracts pay out based on three-month sterling Libor and show little sign of releasing their hold on the market, as the products