GBP/USD - Pill & Mann, any change?
We were neutral-to-bullish in yesterday's The GBP Week - Haskel not for turning yet within 1.2725 - 1.2925.
We largely stand by that, as Cable peaks lower once more at 1.2861 Monday.
Recall in Monday's RISK section BOE's Haskel signaled that he will vote unchanged in his final meeting in August, warning that a 'tight and impaired' labor market will keep inflation too high. Haskel would rather hold rates until there is more certainty that underlying inflationary pressures have subsided sustainably.
Pill and Mann are other scheduled MPCers today (the latter after European hours) and will garner plenty of interest for fresh dialogue following June's perceived more dovish BOE rates meeting and the UK general election.
Pill has voted unchanged all year so far and spoke publicly in mid-May, saying it s not unreasonable to believe that through the summer we will begin to see enough confidence in the decline in persistence that bank rate will come
under consideration; it s important to recognise we can cut Bank rate, while still leaving some restriction in the system.
Former hawk Mann has voted unchanged in the last three meetings and in mid-April warned the fragmenting global economy will leave countries more exposed to inflation shocks in future, posing a test for central banks. At the IMF, Mann added central banks need to be on high alert because the 'great moderation' the years of stable inflation and low volatility is over. As a result, they will need to exercise their independence more actively.
See window five of the Dashboard, implied probability of a BOE rate cut in August stands at 66%, with the September meet pricing in a full -25BPs rate cut.
Any change today?
It could be an impacter.
- Cable is back to attacking the 200-WMA at 1.2848 after a failed bid that resulted in a correction from 1.2860 (12 Jun high)
- An overrun of 1.2894 (8 Mar YTD high) features a slew of Fibonacci projections at 1.2908/47/86 measured from 1.2446 (9 May higher low)
- The downside is buffered by the rising 50-DMA near 1.2685 and only below the 200-DMA near 1.2580 alerts 1.2446 support is vulnerable
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