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UK curve implies Nov 2015 rate hike - BBH

FXStreet (Guatemala) - Analysts at Brown Brothers Harriman explained that following last week's BOE Quarterly Inflation Report that highlighted the downside risks to inflation in the coming month, the UK today reported slight higher than expected consumer prices.

Key Quotes:

“The year-over-year pace rose to 1.3% while most had expected an unchanged reading at 1.2%”.

“Education and clothing prices were firm. Fuels and transportation prices fell. The core rate was unchanged at 1.5%”.

“Input producer prices fell 1.5% on the month to bring the year-over-year rate to -8.4% from -7.4% in September”.

“Output prices fell 0.3% on the month for a -0.5$ year-over-year rate. We would not read too much into this data”.

“The implied yield of the December 2015 short-sterling futures contract slipped and now is now 16 bp from last Tuesday, the day before the QIR”.

“The OIS curve implies that the market has pushed out the first hike toward November 2015”.

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