GBP/USD is agency just below key resistance at 1.3600. UK inflation expectations had been anchored in Might, BBH FX analysts report.
60bps of cuts nonetheless priced over 12 months
“The BOE’s Resolution Maker Panel (DMP) survey confirmed 1-year expectations dipped to three.0% (consensus: 3.2%) vs. 3.1% in April and 3-year expectations printed at 2.7% for a second consecutive month. Each sequence are nonetheless above their sequence lows of two.5% in October 2024 and can doubtless preserve the Financial institution of England (BOE) on a cautious easing path.”
“Certainly, the BOE is predicted to pause easing on the subsequent June 19 assembly. Wanting forward, the swaps market continues to indicate 60bps of cuts over the subsequent 12 months and the coverage charge to backside between 3.50% and three.75%.”
“The Workplace for Nationwide Statistics (ONS) flagged an error to its April CPI report however that gained’t shift the dial on BOE charge expectations. In accordance with the ONS, April headline CPI was revised down by 0.1pts to three.4% y/y, aligning with the BOE’s projection and down from the preliminary 3.5% print.”
