(UK) Former BoE inflation hawk Sentance questions if the MPC has gotten inflation under control.
(UK) BOE expected to sharply downgrade its growth and inflation forecasts as part of its quarterly Inflation Report to be published on Wednesday – UK press.
INSIGHT: The previous BOE Quarterly Inflation Report from May 16th:
How to interpret these headlines?
BOE Quarterly Inflation Report is scheduled on Wednesday this week and it is usually a strong market mover, especially when rumors are flying wild before the scheduled release time. In the case of this upcoming release, I believe the market should be pricing in a more dovish tone report, thus increase the chances of pre-selling on the GBP, therefore I’d recommend to go LONG on the EURGBP as the Euro is now picking up momentum from risk appetite sentiment. I wouldn’t be surprised to see EURGBP around the 0.84 ~ 0.90 levels by the year end.
Considering that OECD, IMF, and even some private institutions have already downgraded their asessments of UK’s GDP for 2012 from +0.5% to -0.5%, I really don’t see much risk in EURGBP to drop down and retest the 0.77 level, but the potential to go up above the 0.8000 level is high, especially with ECB’s pledge to “do whatever it takes” to solve the EU crisis…
BOE Quarterly Inflation Report Expected To Be Sharply Downgraded…
August 6, 2012 by 1 Comment