BOE MPC decision looming ever closer so what can we expect ?
The latest BOE MPC policy decision is due shortly at 11.00 GMT 14 Sept
Eagerly awaited and a lot of hot air/wasted words in the run up so I'll keep this brief ( quite part that I've done enough typing for one day already)
Here's my thoughts via a few bullets:
- stronger inflation still outpacing sluggish wages
- BOE know inflation an issue but see it receding from these current levels between 2.8-3.0% before year-end as per previous f/casts comments so why should they panic now to hike rates?
- inflation concerns though could well bring another hawk to the vote ( probably Haldane) and make it 6-3 ( today we are back to full complement of 9 MPC)
- UK economic growth still sluggish . See recent GDP and other data points
So no rate hike anytime soon but an added hawk vote will send algos into a knee-jerk frenzy higher. Sellers be ready.
No increase in hawk vote should see algos send GBP lower. Buyers be ready.
Large option expiries at 1.3200 tomorrow will be in play either way.
I think the BOE really want to raise rates, as do the Fed, if only to create some wiggle room when things go pear-shaped again which I believe they will. Current uncertain conditions though make that desire far less easier to action.
As ever trade what you see and be ready with your entry/exit levels. Ours is not to reason why...
Carney - Plenty to be concerned about