BoE And ECB Terminal Rate Expectations Dip Post-US CPI
ECB and BoE terminal rate pricing has dropped sharply since the US CPI data. ECB terminal rates seen 2.81% in Jul 2023, off 13bp (earlier had been as much as 19bp lower).
- That's about a half of a 25bp hike taken out of the path, which is now seen as having a total of 140bp in further ECB tightening.
- Dec ECB meeting pricing has dipped from 56% prob of a 75bp hike (as opposed to 50bp), to 32%.
BoE rates are now seen cresting around 4.50% in mid-2023, around 157bp from here: about 11bp lower vs pre-US CPI.
- Dec BoE meeting hike pricing now sees 36% prob of a 75bp increase, vs just under 50% prior to US CPI.