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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
- A 25bp hike was delivered by the MPC as was unanimously expected by sell-side analysts. Markets had fully priced a 25bp hike with a 40% probability of a 50bp hike also being priced in. The knee jerk market reaction was in a dovish direction because only a 25bp hike was delivered. However, markets quickly reversed course and priced in a substantially more hawkish outlook for the Bank of England due to the change to forward guidance.
- The forward-looking language was strengthened in four main ways, we discuss these in the full document.
- Markets are going even further by fully pricing a 50bp August hike with around a 25% probability of a 75bp hike. We think the debate for the MPC will be between 25bp and 50bp, and see very little chance of a larger than 50bp hike, irrespective of what other central banks do. Relative to the Fed and the ECB, the BOE’s position is different. These reasons are also discussed in the full report.
- Markets are going even further by fully pricing a 50bp August hike with around a 25% probability of a 75bp hike. We think the debate for the MPC will be between 25bp and 50bp, and see very little chance of a larger than 50bp hike, irrespective of what other central banks do. Relative to the Fed and the ECB, the BOE’s position is different.
For the full document including the summaries of 22 sell-side analyst views see:
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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