e joined two other dissenters and the 6-3 vote raises the prospect of a new 25 basis point hike as early as the August meeting. Sterling reacted as one would expect, rising against every major G10 peer.

The Dollar lost ground in London trading against its major peers in the absence of jarring headlines from either side in the China-US trade dispute. The Euro sold off early on, on news of more Eurosceptic appointments in Italy but it quickly recovered to end the day slightly up.

The best performing G10 currency was the Swiss Franc. Traders disregarded the Swiss National bank’s dovish message, as the Franc was buoyed by fading risk appetite and safe haven flows.

A good day for Sterling, finally

The Bank of England kept rates unchanged, as expected. However, the number of dissenters in the Monetary Policy Committee voting for an immediate hike rose to three, as Chief Economist Andy Haldane joined the hawks. It’s the first dissent by a BOE Chief Economist since 2011, and as such it carries more weight than most other individual votes. We think this is a significant shift that opens the door for an August hike. The rally in Sterling is fully justified and the Pound still has room to rise further in our view.

The news that Europhobe Alberto Bagnani had been named chairman of the Italian Senate hammered the Euro early on, but the common currency managed to put in a technical bounce during New York trading.

It’s PMI day today on both sides of the Atlantic. The indices of business activity will be released in the US and the Eurozone, and this is probably the best leading indicator of economic activity, particularly in the Eurozone. Expect Euro volatility early on as the numbers are published.