BoE Passes Without Event - Outshined By Turkish Hike

Published date: 13/09/2018
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Today's midday announcement by the BoE has been a non-event as many had assumed. All 9 members of the MPC voted to keep rates unchanged as widely anticipated. The statement also paid due regard to the uncertainty of the Brexit negotiations ahead, and also highlighted some of these worries reflected in the PMI data. The MPC has also flagged the broader risks from the US-China trade spat. Their view remains that of gradual rates rises however to a limited extent. 

However, at the same time we also saw the Turkish central bank lifting their 1 week repo rate by 6.5%, and this led to a sharp rally in the TRY vs the USD, which then led to follow-on moves in the major USD pairings - Cable moving higher alongside the EUR and the AUD, but well contained ahead of 1.3100 - not strong resistance seen here.  

EUR/GBP is also trying to dig in ahead of 0.8900, and should we close above here again, could signal a notable base from which to retest the 0.9000 level again. 

With so many risk events today - we also have UK cabinet meeting today discussing plans to cover a no deal outcome on Brexit - we expect larger orders will be tested across the board, so this afternoon could be a lively one with the ECB press conference sure to spark up some volatility of its own. 


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