That could give succour to market bets that the Bank of England is more likely to hike by 25 basis points than by 50 bps at Thursday’s meeting. Pre-CPI pricing implies a 75% chance of the former and a 25% chance of the latter.
But a bit the questions Australia’s comeback at Edgbaston has asked about England’s aggressive new cricketing style, an upside inflation surprise can upset the policy outlook.
Gilt yields paused a recent selloff on Tuesday as traders wait on the data and policymakers’ response, while sterling seems to be thinking better of a breakout beyond one-year highs, as the economic outlook is not pretty.
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In Asia, China’s slowdown and the lack of big-bang stimulus had markets on the slide. Hong Kong’s Hang Seng (.HSI) gapped some 2% lower and is again eyeing 2023 lows, while the yuan is cheaper than when China’s borders were still shut in December.
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/cloudfront-us-east-2.images.arcpublishing.com/reuters/Y3FJCC5435N5DMDZDV2KI4TUNU.jpg "Nevermind the cricket, here's inflation 40")
