Bank of England meets Wednesday
The implied odds of a Bank of England rate hike on Wednesday are just above 90%.
They have steadily risen in the past two months from below 40% in early June as economic data stabilized (especially retail sales) and the BOE ramped up the hawkish rhetoric.
The OIS market took a dip on Friday to show odds at 76% but that may have been a result of low liquidity as it was at 90% before that.
With a hike mostly priced in, the real test for the market will be forward signals. Currently the market puts just a 12% chance on another hike before year end. Many thing the BOE will want to wait until they have more clarity on Brexit before thinking about tightening more aggressively.
