Financial markets had been relatively insensitive to political and financial events over the month, including the European elections. Implied volatility remained low across a range of assets, especially at short horizons, and there was mounting evidence of investors searching for yield. UK short-term interest rates had been sensitive to data outturns and MPC communications, but had ended the month little changed from their levels at the time of the May meeting. One year overnight index swap (OIS) rates, one year forward had, for example, risen early in the month before falling on the back of a combination of ... (full story)