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###POV: MNI PINCH calculates the markets......>

SONIA: ###POV: MNI PINCH calculates the markets pricing in just over a 43%
chance of a rate hike in August this year, down from near 53% seen last week, as
markets react to mild risk-off sentiment and following todays sharp move in
reaction to softy Eurozone flash PMI data. While the chance of a 25bps rate hike
in November has slipped to 77% from 89%.
- This posses risk for release of UK April inflation data. MNI median forecast
is for headline CPI and core CPI to remain unchanged at 2.5% and 2.3%
- With money markets already rallying this morning (Short Sterling 1 to 6 ticks
higher), it is likely that any downside surprise will not lead to much of a
rally. However any upside surprise could see a sharp correction to money markets
and the rise the chance of a rate hike in August/November.

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