Focus on BoE survey today – ING

In the UK, the focus today will be on the Bank of England’s decision survey of chief financial officers. The most interesting question for the market will be whether expected and realized wage growth continues to decline, notes Chris Turner, currency strategist at ING.

1.3100 is the risk for GBP/USD today

“If so, the market may be tempted to close the gap between the BoE and Fed easing cycle prices. Looking at the price before the end of the year, we see the price of 107 bps for Fed easing and only 44 bps for BoE. We suspect that the BoE may be priced higher, which could leave GBP/USD a bit vulnerable.”

“Also today is Bank 1.3100 is the risk to GBP/USD today from England’s chief economist, Huw Pill, speaking at the Bruegel Institute in Brussels at 11CET. He voted against the rate cut in August. It is unclear whether he will touch on monetary policy in his speech today, but if he does, any sign of greater confidence in the disinflation process could also hit the pound.”

“1.3100 is the risk for GBP/USD today and in the medium term we see a rise in the 1.30s cable.”