Below is a quick look at what various market participants are expecting from today's UK CPI data.
Knowing the consensus is important, but knowing where the minimum and maximum expectations are, as well as any herding around a particular side, can be very helpful for risk event traders like me.
For the Headline YY CPI, consensus is clustered around 3.7%, with a minimum expectation of 3.5% and a maximum of 3.9%. Already a slight skew towards a higher print for today.
For the Core YY CPI, consensus is also sitting at around 3.7%, with a minimum of 3.4% and a maximum of 3.9%.
As for the Services CPI YY, consensus is clustered around 4.8%, with a minimum of 4.7% and a maximum of 5.0%, with a slight skew towards a higher print.
As always, any prints that fall below the minimum or above the maximum will receive a lot of attention from participants.
Interest rate expectations for the September meeting is at 94% probability of a hold, with October at 78% probability of a hold. There are only 13 basis points of easing priced into year-end.
This means a big surprise beat likely sees markets price out the likelihood of another cut completely. The size of miss it would take to persuade markets of an October cut will need to be big.
