The OIS market sees ~73% odds of the BOE cutting its bank rate on 30 January
That is up from ~60% from before the UK retail sales data was released today. A 25 bps rate cut by the BOE is now fully priced in by the 5 May policy meeting.
The heightened odds is giving a bit of a reality check to the short squeeze higher seen earlier today as the pound continues to linger at the lows in European morning trade.
Cable is at 1.3040 and is keeping under its 200-hour moving average with price action hovering just above the 100-hour moving average @ 1.3025.
Looking ahead, economic data next week will either seal the fate of the pound or give it a mild reprieve as we will get UK labour market data on 21 January before post-election PMI data on 24 January.
In any case, even if we do see better data prospects from the releases there, I think it is suffice to say that we can't rule out a BOE rate cut on 30 January.
