– Ahead of Fed and BoE decisions
Lagos — The British pound weakened as markets digested the latest inflation data and looked ahead to key economic events.
The Consumer Price Index (CPI) rose by 0.1% month-on-month and 2.6% year-on-year, in line with expectations. Core inflation increased to 3.5%, slightly below market forecasts, signaling a small easing of underlying price pressures.
The benchmark 10-year gilt yield remains near its near-term high of around 4.5%, reflecting continued concerns over inflation.
With central bank decisions from both the Fed and the Bank of England (BoE) on the horizon, bond market volatility is expected to stay elevated. Later today, the Federal Reserve’s anticipated 25 basis point rate cut could offer support to the Sterling, though a more hawkish tone might limit any further gains.
The focus will then shift to the BoE’s meeting, where unexpected decisions could drive significant movements in both the currency and bond markets.
*Maria Agustina Patti Financial Markets Strategist Consultant to Exness
