Strong UK data fails to lift GBP
The British Pound is slightly higher versus the US Dollar but lagging most G10 peers.
The UK retail sales and Purchasing Managers’ Index surprises have been strong, with a manufacturing PMI of 52.8 and a services PMI of 51.8.
Rate markets price modest tightening by September and November, with the rate path currently priced for 16 basis points of tightening in September and 32 basis points for November.
The options market is signaling a renewed demand for protection against GBP weakness, driven by geopolitics and domestic political concerns.