A pretty lacklustre day in markets with very little to drive change, and market flow was an opposite of Monday's trading, with USD advancing, and GBP and EUR weakening all marginally. There was large interest in some markets of the market betting on 0.75% worth of rate cuts being conducted by the BoE by June. This would take interest rates to 4.5%, and is contrary to current market pricing suggesting a BoE rate of 4.81% by June. Should this play out then this will be GBP negative.
* Daily move - against G10 rates at 7:30am, 10.01.24
** Indicative rates - interbank rates at 7:30am, 10.01.24
Following on from wagers being putting on for 0.75% worth of rate cuts by the BoE by June, Governor Bailey will be testifying in parliament. This will be the focus for today, and we’ll be listening out for his stance on rates for this year ahead of UK inflation numbers next Wednesday. Otherwise expect markets to continue to wait on tenterhooks for US inflation numbers tomorrow.
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