75 basis points for the BoE

Today's news headlines:

‘Traders price in two three-quarter point BoE hikes by year end’. Traders are ramping up rate hike bets for the Bank of England ahead of its policymaker meeting this Thursday. Over 200 basis points of hikes are priced in for the next three gatherings, implying two outsized moves in the two meetings ahead. If rate hikes continue at their current pace, the policy rate could rise to as much as 4.5% in March as the central bank attempts to rein in surging prices. (Bloomberg)

‘Liz Truss pessimistic on UK-US trade deal in the near future’. Liz Truss is scheduled to meet US President Joe Biden this Wednesday, but a downbeat Truss played off hopes of a UK-US trade deal in the medium term. The focus could be shifted back to the Northern Ireland protocol, which Truss hopes can be decoupled from the decision on whether a trade deal is made. For now, the UK has a trade deal with India in focus and securing a position in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. (Bloomberg)


Today

Asia shares gained overnight after a bounce in US stocks yesterday. US Treasury yields continue to rip higher, with the two-year yield approaching 4%, the highest since 2007, as US recession fears spike. The Pound remains under pressure as we head toward the BoE meeting later this week, with aggressive market pricing opening the currency up to downside should the central bank disappoint. 

Events

German PPI MoM (Aug): 7.9% (est. 2.4%)
Canada CPI MoM (Aug): 1:30PM
US Housing Starts (Aug): 1:30PM
European Central Bank President Christine Lagarde speaks: 6:00PM


Interbank rates*:

GBPUSD – 1.1460
GBPEUR – 1.1418
EURUSD – 1.0037
USDCAD – 1.3240

 

Please contact your Dealer about any upcoming FX requirements you may have, or call +44 (0)20 3465 8200. 

*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.