Limited Changes To ECB/BoE Peak Pricing As MPC Delivers "Hawkish Hold"

Thursday's "hawkish hold" by the BoE saw peak hike prospects pared slightly, while ECB pricing remained relatively steady.

• BoE terminal Bank Rate pricing flat at 5.44% (19bp of further hikes left in the cycle): Having ticked up 2bp on the day pre-BoE decision, the unexpected 5-4 hold saw pricing drop 2+bp, recovering to flat on the day suggesting just under 20bp of hikes the rest of the cycle and a hike deferred but not altogether cancelled. The narrow 5-4 vote split, along with some the comments from the Bank, pointed to a 'hawkish hold.'
• ECB terminal depo Rate pricing -0.9bp to 4.06% (6bp of further hikes left in the cycle): ECB peak pricing sagged over the course of the afternoon, as multiple ECB speakers suggested limited appetite for further rate hikes. There's still <10% chance implied of a hike at the October meeting, and only 25% probability of a further hike at all.