26/07/2024
Increased risk tolerance dominated the market today, leading to a decline in yields and a weakening of the USD against various currencies, including a rebound in GBP. Earlier, UK construction PMIs showed improvement, following yesterday’s upward revision of the services PMI figures. However, caution is advised regarding GBP due to recent comments by BoE chief economist Huw Pill suggesting potential rate cuts, echoed by BoE member Swati Dhingra, who highlighted significant economic risks if interest rates remain elevated. Although money market pricing on UK rate cuts remained largely unchanged, there appears to be a dovish sentiment emerging among some BoE members.