@MacroBoehmer Agreed but with US yields now at or above 4% things feel a little asymmetric. CPI โneedsโ to stay firm to support these levels. A downside surprise will be more volatile than a firm CPI print (IMOโฆ)
The biggest impact of the BoE decision today is not the move in GILTs - which has been epicโฆ
Its influence on other central banks is of greater importance
The BoE still carries significant weight in the global central banking circles
โฆAnd it offers critical signaling power
The market is split between a 50 & 75 bp hike for the ECB tomorrow โ yet how could they not opt for 75?
Do they really want to undershoot the market?
Look at JPY to see what can happen if interest rate differential blow outโฆ
The pressure was large and has only increased