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Reaction in UK markets to higher than expected US CPI

UK
  • SONIA futures now down up to 5.0 ticks on the day (a move of around 10 ticks for some contracts since the data was released).
  • Markets now pricing in around 115bp for BOE this year - up from around 110bp pre-data. There has been a gradual steepening of the curve through the near-dated MPC pricing.
  • Gilt futures now around 50 ticks lower on the day (118.65 at writing - down 100 ticks from a high of 119.69 earlier this morning and around 50 ticks since the US inflation print).

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