Sterling Outlook: Societe Generale

Societe Generale notes...

• GBP/USD has fallen by nearly five big figures since the March MPC meeting. Our expectation is for a dovish set of minutes today with a unanimous vote in favour of leaving rates unchanged, though the risk of a 7-2 split cannot be entirely ruled out as members Weale and McCafferty resume their call for a rate increase. 
  
  
• Labour market data are forecast to show no change in the ILO unemployment rate at 5.7%. 
  
  
• Average weekly earnings, ex-bonuses, are forecast at 1.8% (up from 1.7%). Dovish MPC minutes, combined with tame earnings, will then put the emphasis on Chancellor Osborne's final budget before the 7 May election. 
  
  
• Our Economics team expects less austerity and few giveaways from the UK budget today. 
  
  
• From a bond market perspective, the latest dealer survey expects a 17% rise in gilt issuance for the year 2014-15 (up to £147bn) to cover the budget deficit and refinance maturing debt.