From the FXWW Chatroom: WP… Gbp – Talk of barrier int at 1.3250 and 1.3300 with a larger barrier in eurgbp reported at 0.9000 – note in the latter strike there is a large 0.9000 vanilla strike at the end of next week (11.8) in euro 800m in DTCC. Gbp offers 1.3235-50 ahead of the first barrier. Gbp focus on Bank of England tomorrow on the press conference and inflation report. At the last meeting markets were caught out with the 5-3 vote and Carney’s flip flopping on when rates could be hiked. Recent weak data and Brexit uncertainty might have been enough to see BoE Chief Economist Haldane move away from voting for a hike. McAfferty and Saunders are still expected to vote for a hike and Forbes replaced with a more dovish Tenreyo then markets look for a 6-2 vote with a risk of 5-3 if Haldane sees through the data and Brexit uncertainty. Reuters report Economists expect the BoE to push up its inflation forecasts slightly but to lower its projection for growth after the weak start to the year. The bank rather than raising rates could take baby steps by not renewing the bank lending incentives that were part of its big stimulus push a year ago, shortly after the Brexit vote shock.
The Term Funding Scheme is already three-quarters of the way towards its 100 billion-pound target.
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