Wider Themes Apply Light Pressure To BoE pricing

Little net movement in BoE-dated OIS today, with the rally from cheaps and downtick in crude oil futures helping bias pricing a little softer, despite a meaningful upward revision in the final UK services PMI print (which still left the metric in contractionary territory).

• Liquid contracts are little changed to 2bp softer on the session.
• ~10bp of tightening is still showing for next month’s MPC, with terminal policy rate pricing ~20bp above prevailing levels.
• Comments from BoE Governor Bailey weren’t impactful for markets, as he covered what he believes to be the consequences of Brexit and outlined his support for the existing 2% inflation target. He also pointed to the potential for inflation to move to 5% or lower this year, along with the risk posed by still elevated food prices.