The pound fell to a session low after weaker UK November monthly GDP data

Cable slipped to a session low of 1.2966 from around 1.2990 on the data release but you'd have to figure that more emphasis needs to be put on the fact that the data captures pre-election sentiment - one that is plagued by Brexit and political uncertainty.

Don't get me wrong, I'm not making a case for the pound to retrace higher by any significant margin. There is no doubt that sentiment continues to lean towards the BOE taking easing action and the softer data today vindicates that.

However, I just want to point out that this isn't that big of a game changer as to what any post-election data might suggest in the coming weeks/months.

If we continue to see post-election data allude to more of a slump in the UK economy, then I reckon that would give the BOE more confidence to pull the trigger.

All that said, if inflation data this week and labour market data next week points to added softness, it could very well spur the BOE into taking action at the end of this month.

Odds of a 25 bps rate cut on 30 January now sit at ~50%, more than double the ~23% seen at the end of last week:

WIRP UK 13-01