Market Pricing Steady Around 30bp Of Tightening For This Week’s BoE

Little net change on the day when it comes to pricing surrounding this week’s BoE monetary policy decision, leaving ~30bp of tightening showing for that event, while all 40 economists that have submitted their expectations to BBG look for a 25bp hike, which would leave the policy rate at 4.75%.

• It remains the case that most see a high bar re: the BoE returning to a 50bp hiking pace, although some deem the bar to be lower (to varying degrees) than it was ahead of last week’s labour market report.
• Markets remain more aggressive than the analyst community, with ~95bp of cumulative tightening showing over the next 3 meetings.
• Wednesday’s CPI release provides the major economic release of note and comes a little over 24 hours before the BoE policy decision (the MPC had access to it this morning).
• Terminal rate pricing is ~140bp north of prevailing levels at present, with the dated OIS strip steepening on the day, as core global FI cheapens.