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Ekonomické zprávy
22.10.2021

More weak data to dampen BoE's hike expectations and sterling – MUFG

FXStreet reports that economists at MUFG Bank believe the market is too aggressive pricing further rate hikes by the Bank of England, which should weigh on the pound.

“Sales excluding fuel plunged 0.6% MoM, weaker than the expected 0.3% gain. This is a big miss but the 0.5ppt upward revision to August’s MoM decline (-0.7% from -1.2%) needs to be accounted for. We’ll stick with November for now but the important point to make here is that the pricing in the market on BoE rate hike action going forward is still excessive and we believe incoming data will adjust lower those expectations even if the BoE does go by 15bps on 4th November. That, in our view, leaves the pound vulnerable to a correction lower.”

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