BOE minutes preview

Recently pound has suffered as weaker data poured water over rate hike bet. Traders and investors will focus if weaker economic activity changing the moods of MPC members.

ILO unemployment data & the Bank of England (BOE) minutes will both be released at 9.30 am GMT. Pound is trading around 1.475 this morning. It is down sharply after the support at 1.50 got broken.

1)     The Minutes-

• The market will search for any sign of dovish bias in the statement on the back ground of falling inflation and weaker economic activities. Latest data showed housing market is growing still but at a slower pace and inflation expectation continue to drop.
  
  
• The most important headline will be the votes by the member. Two hawkish members have restrained themselves in January, being hawkish since August 2014.
  
  
• If policy voting tilts towards dovish, pound will suffer further against rest of the currencies. Presence of hawks will be bullish for the pound but unlikely over weaker economic activities. No change could boost pound a little, but any upside will remain short.

 2)     Unemployment Rate-

• Unemployment rate is at 5.7% and is expected to improve further and fall to 5.6%. Focus will be on Average earning change. Previous report saw an increase by 2.1% including bonus.

• Any deterioration would see rate hike bets disappear further and pound to suffer more.

Probable impact from some of the outcome is explained through the following table