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Softer CPI Weighs On Hike Odds, One Further Hike In Cycle No Longer Fully Priced

STIR

SONIA futures firm at the open, with the softer than expected (but still elevated) UK CPI release pushing the space higher as markets re-assess the outlook for further BoE rate hikes.

  • Futures run 9-21bp firmer through the blues, with the reds leading.
  • BoE-dated OIS softens in tandem, with odds of a hike at tomorrow’s meeting easing to 56%, while terminal policy rate pricing comes in to 5.50% i.e. markets only discount one further hike in total post-CPI.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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