GBP top performer on UK CPI through the roof - Scotiabank

Analysts at Scotiabank explained that GBP is outperforming, rallying in response to the release of stronger than expected CPI data with headline coming in well above expectations at 2.3% y/y (vs. 2.1% exp. & 1.8% prev.). 

Key Quotes:

"Core surprised to an even greater extent, printing 2.0% y/y (vs. 1.7% exp. & 1.6% prev.)."

"The data, viewed in the context of last week’s more-hawkish-than-expected BoE meeting & minutes, have firmed expectations for BoE tightening and pushed expectations of a Q1 2018 hike above 50%."

"However, we are cautious on the basis of considerable near-term risk as we look to the anticipated March 29 trigger of Article 50."