Bank of America interest rate strategist Sfiah Salim is inclined to go long on UK interest rate futures compared to shorting Eurozone interest rate futures. She believes that the market has overestimated the Bank of England's interest rate hike. Salim suggested that when the spread is about 139 basis points, the target interest rate spread is 120 basis points by going long for the UK 3-month interest rate futures and shorting the Eurozone 3-month interest rate futures; currently, the interest rate spread between the two is about 132 basis points. “We believe the differences in policy statements between the two central banks are widening, and the Bank of England's hawkish tendencies have clearly cooled down since June,” she wrote in a research report on Monday. Central bank policy pricing in major developed markets is currently “highly convergent”. Among them, the ECB and the Bank of England's market expectations deviate “most significantly” from the bank's model predictions.

Bank of America interest rate strategist Sfiah Salim is inclined to go long on UK interest rate futures compared to shorting Eurozone interest rate futures. She believes that the market has overestimated the Bank of England's interest rate hike. Salim suggested that when the spread is about 139 basis points, the target interest rate spread is 120 basis points by going long for the UK 3-month interest rate futures and shorting the Eurozone 3-month interest rate futures; currently, the interest rate spread between the two is about 132 basis points. “We believe the differences in policy statements between the two central banks are widening, and the Bank of England's hawkish tendencies have clearly cooled down since June,” she wrote in a research report on Monday. Central bank policy pricing in major developed markets is currently “highly convergent”. Among them, the ECB and the Bank of England's market expectations deviate “most significantly” from the bank's model predictions.