The market thinks the BOE is going to hike
The Bank of England is probably going to hike tomorrow.
The OIS market is pricing in a 90.1% chance of a rate hike. That's near a contract high as the market increasingly believes Carney is going to raise rates. That means it's not the decision to hike that's going to drive markets, it will be signals going forward.
On that front, a second hike in December is only a 9% probability. However that rises to 35% in February and above 50% by March.
So if the Bank of England hikes but Carney indicates that it's a one-off, it could be a very bad day for the pound.
