GBP: Ramsden moves the market Sterling markets moved on Friday after the Bank of England's deputy governor, Dave Ramsden, sounded less concerned about price pressures and suggested that there were indications of UK inflation converging to that of the eurozone. Crucially, he added that the Bank will be “responsive” as evidence on inflation accumulates. Markets revamped some of their BoE rate cuts bet on Friday after strong wages and inflation had triggered a hawkish repricing. Expectations are now for 53bp of easing this year, with a first 25bp cut fully priced in for August. The only market-moving data release in the UK this week is PMIs on Tuesday. Remember that UK activity surveys have generally exceeded expectations in the past six months, but also that March saw the first month-on-month decline in composite PMI. While still above the 50.0 level (in expansionary territory), back to back MoM drops could help heavier speculation on rate cuts. We feel the rebound in EUR/GBP might have happened a bit too early, and still see risks below 0.8600 in the short term as markets hold greater dovish conviction on the ECB than the BoE. Ultimately, beyond the short run, the upside potential for EUR/GBP should still be unlocked by the BoE cutting more aggressively than market currently prices in, in our view.