But for the UK, the outlook continues to be gloomy. As the chart below shows, markets don’t expect a rate hike from the Bank of England for another 5 years.
In the US we got an inflation update via the price index of Personal Consumption Expenditures (PCE), the Fed’s preferred measure. Core inflation held at 1.6% year-on-year (rounded) while headline dropped a touch to 0.9% – see chart below. Both numbers were slightly below expectations. Hence money market yields hardly moved on the day, despite the return of risk appetite.