GBP traded higher following the general higher risk appetite in markets. Money markets eased some of the odds of a June rate cut by 5bps, as well taking the pressure off GBP. Trading around USD was relatively tight as well with treasury yields marginally higher.
*Daily move - against G10 rates at 7:30am, 21.05.24
** Indicative rates - interbank rates at 7:30am, 21.05.24
Quiet day ahead with only the Canadian CPI numbers out in the afternoon, as well as a host of Fed speakers and BoE Bailey. Client focus remains on UK CPI numbers tomorrow morning, and whether the data will add to the probability of seeing a rate cut by the BoE in June as opposed to August. GBP has been trading higher steadily going into the numbers suggesting that perhaps the services CPI number won't fall as much as expected, given that in 2022 and 2023 we saw big price spikes in April. As mentioned in yesterday's report the key focus will be on the services and core component to dictate which way GBP travels going into June's CPI release & the BoE meeting.
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