That Merve the Swerve. He can sure write a hawkish letter.
He’s got the market all a twitter this morning that the BOE is gonna rush out and hike. Looks like the limit of his tolerance is two-years over target…
The market is now pricing in 24% odds that the BOE will put rates up when it meets next month. Mr. Market has almost 90 bp of tightening priced in over the next year, a bit more than the ECB, which the market sees tightening by 87 bp between now and March 2012.
EUR/GBP is down to 0.8375 while cable is near session highs in the low 1.6140s. Resistance lies at 1.6160 and 1.6185.
