BoE Pricing Off Dovish Extremes

BoE-dated OIS has moved away from post-decision dovish extremes, with Governor Bailey pushing back on any talk/speculation re: future rate cuts, while an extension of the weakness in the longer end of some of the core global FI curves is probably filtering into pricing. A quick reminder that although the BoE noted that more tightening may be necessary, it also continued to refrain from any commitment to further policy tightening, leaving data at the fore when it comes to shaping future decisions, while also sounding a little more upbeat re: the fight against inflation, leaving pricing 2-10bp lower on the day.

• September’s meeting sees somewhere in the region of ~23bp of tightening priced, while terminal rate pricing is closer to 5.80% after showing below 5.75% during the BoE’s post-meeting conference.