GBP is much stronger after the minutes of the BOE meeting as a third member voted for a hike and Sentance voted for a 50 bp hike. Despite the reaction in the forex market, interest rate futures are virtually unchanged. This argues, in my mind, that cable and GBP in general, may give back some of the gains made on the minutes.
Here are the latest odds of moves at the next central bank meetings and how much the markets have priced in over the next year. Note that the market is now pricing in better than 50% odds of a cut by the RBNZ in the wake of the earthquake there….
