THE EXCHANGE

UK RATES IN FOCUS

Following a tumultuous end to 2015 where the Fed raised the Federal Funds target and the ECB lowered their main refinancing rate, investors, analysts and traders finished the year contemplating what’s next from the Bank of England.

While many analysts had pencilled in an upward move at some point in 2016, the initial market moves in Short Sterling futures suggest otherwise - the ICE Sterling December 2016 contract saw a strong rally in the first month of the year. At the end of the January, trading in the Sterling contract implied little change of a near-term shift in monetary policy, with the first shift priced in third quarter 2017.