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BoE Peak Pricing Ticks Up Tuesday, ECB Implied Eyes Inflation Catalyst

STIR
  • ECB peak hike pricing was little changed by Tuesday's close, with a 4.05% depo rate seen in December 2023 (implying 5bp of hikes from current levels). With just 2bp priced for October's meeting. the next potential major catalyst for an uprating is the Eurozone September flash inflation data due Thu and Fri (MNI's preview is here).
  • There was no change today in expectations for cuts expected in the year following the peak rate, at 61bp by end-2024.
  • BoE terminal pricing ticked 3bp higher, with the 18bp in cumulative hikes priced by for Feb 2024 representing the highest implied Bank Rate (5.43%) since last Thursday's close. Near-term pricing didn't change much though with just 9bp of a hike seen in November (around 36% prob of a 25bp raise, unch from Monday's close).
  • Around 79bp of cuts are seen in the year following the peak - 1bp greater than seen at Monday's close.
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