Whilst sterling rates have come down significantly over the past month, a rethink of the economic outlook could offset some of these gains. We still see further weakness in the jobs market, but Thursday’s monthly GDP numbers did bring some optimism. When you see 5Y rates underperform the rest of the curve, markets are signalling a more positive take on the business cycle. In effect, this also pushes back the Bank of England's easing expectations. And indeed, the probability of a rate cut in March is gradually falling, with now just 9bp priced in. Next week will be important for GBP rates as we get more inflation and ... (full story)