The Bank of England is getting ready for “Super Thursday” and tension is high. What can we expect? Will the BOE send the pound shooting higher? Here is what to focus on:
Here is their view, courtesy of eFXnews:
Credit Suisse FX Strategy Research notes that markets will likely focus on the vote count at Thursday’s BoE policy meeting, highlighting that the most recent meeting on 15 June featured a hawkish surprise on this front, with three MPC members (Saunders, McCafferty and Forbes) voting for a rate hike, against five remaining members voting for an unchanged outcome.
“Since then the composition of the MPC has changed, with Kristin Forbes leaving and replaced by Silvana Tenreyro, who is perceived to be less hawkish than her predecessor.
As a result, our economists now expect a 6-2 vote count in favor of an unchanged outcome. A 5-3 vote tally would be perceived on the margin as a hawkish development, in our view.
While some might view this as a reason to expect limited impact from a hawkish vote tally this Thursday, we note that overall risk reversals remain firmly bid in favor of EURGBP calls over puts – in other words, the correction was rather limited in scope,” CS argues.