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MARKET INSIGHT
  • This morning we have already seen UK inflation data released, with core CPI in line with expectations and headline CPI a tenth higher than expected. The MNI Markets team thinks that combined with Bailey's speech yesterday and other recent data that the probability of a 50bp hike in August has now increased to around 70% (from the 60% we pencilled in following the June MPC meeting), but markets had been pricing in an even higher probability going into the release.
  • In Italy, Draghi will deliver an address to the Upper House at 8:30BST / 9:30CET this morning ahead of a confidence vote with Draghi having reiterated recently that he needs the support of Five Star to continue in office.
  • In UK politics we are due to have the final round of voting for MPs in the Conservative party leadership content. Sunak is likely to make the run-off, having fallen just 2 votes short of qualifying in yesterday's vote. However, there are the 59 votes that Badenoch received up for grabs today and with Mordaunt only six votes ahead of Truss, either candidate could realistically get through to the membership runoff. Voting is likely to take place 13:00-15:00BST with results around 16:00BST.
  • In terms of data today we will receive Canadian inflation at 13:30BST and US exiting home sales data at 15:00BST.

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