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GBP/USD holds recent gains, focus on CPI data
The market has been ramping up rate hike odds by the Bank of England after more hawkish remarks form Governor Bailey over the weekend. Swaps are fully pricing in a 15bp rise to 0.25% at its next (super)meeting on November 3, with the chance of more tightening to follow before the end of the year. Money markets are betting rates hit 1% by the summer of next year with nearly 115bps priced for the coming year. This means interest rates will rise faster than at any point in the post-crisis years. It also implies that inflation is more of a problem in the UK than across the pond in the US. Remember that tapering by the ... (full story)