May 23, 2012
MPC Meeting Minutes is scheduled to
released today and since it´s customary
for BOE (Bank of England) not to release a statement along with its interest
rate decision (2 weeks ago) if there were no changes to either rate decision or
APF (Asset Purchasing Facility, UK´s quantitative easing program); today will be
the first time for a glimpse into what took place during this meeting, here is the forecast:
Rate Forecast 0-0-9 Previous 0-0-9
APT Forecast 0-1-8 Previous 0-1-8
DEVIATION: 2 Votes (BUY GBP on 2
votes of rate hike / SELL GBP on 2 votes of APT increase)
Definition
The MPC meets every month to set the interest rate. Throughout the month, the MPC receives extensive briefing on the economy from Bank of England staff. This includes a half-day meeting known as the pre-MPC meeting which usually takes place on the Friday before the MPC’s interest rate setting meeting. The nine members of the Committee are made aware of all the latest data on the economy and hear explanations of recent trends and analysis of relevant issues. The Committee is also told about business conditions around the UK from the Bank’s Agents. The Agents’ role is to talk directly to business to gain intelligence and insight into current and future economic developments and prospects.
The monthly MPC meeting itself is a two-day affair. On the first day, the meeting starts with an update on the most recent economic data. A series of issues is then identified for discussion. On the following day, a summary of the previous day’s discussion is provided and the MPC members individually explain their views on what policy should be. The Governor then puts to the meeting the policy which he believes will command a majority and members of the MPC vote. Any member in a minority is asked to say what level of interest rates he or she would have preferred, and this is recorded in the minutes of the meeting. The interest rate decision is announced at 12 noon on the second day.
Update (May 22, 2012)BOE Posen has been very outspoken during the last couple of weeks following the MPC Meeting. He started by saying that he voted for more stimulus before he voted against stimulus last week, to further stimulus “might be needed”, to BOE member should consider more stimuli in the future. Add to that sentiment, IMF today called UK out to consider further stimulus if situation warrants it, and considering the slightly worse than expected CPI release (3.0% headline and 2.1% core), it is likely that market may speculate some discussion over increasing the APT during last meeting to Posen possibly switched his vote back to more stimulus… Either way, GBP should be under pressure pre-news, although market may go either way after the release…
The Trade PlanWe will be looking at the vote count today but because of the current economic situation in UK and the uncertainty of the overall market view on Sterling, I’d recommend to sit on the sideline or follow me in the traderoom to trade this release. Due to the nature of this release, you need to have a newswire or audio service in order to trade it. If we see a steady market reaction after the release, it may very well carry over to the NY Session, therefore I’d wait for 5 minutes before even deciding on a trade. If market moves steadily, then I will use the double-fibonacci method and follow that trend.
BOOKS
ACH15® Discovery: always 100% won transactions in FOREX market! - florin iacob- EUR 115,34
EUR/GBP in a Nutshell: A Simple Guide on How to Trade the EUR/GBP in the Forex Market - Elena Sanchez - EUR 7,68
The MPC meets every month to set the interest rate. Throughout the month, the MPC receives extensive briefing on the economy from Bank of England staff. This includes a half-day meeting known as the pre-MPC meeting which usually takes place on the Friday before the MPC’s interest rate setting meeting. The nine members of the Committee are made aware of all the latest data on the economy and hear explanations of recent trends and analysis of relevant issues. The Committee is also told about business conditions around the UK from the Bank’s Agents. The Agents’ role is to talk directly to business to gain intelligence and insight into current and future economic developments and prospects.
The monthly MPC meeting itself is a two-day affair. On the first day, the meeting starts with an update on the most recent economic data. A series of issues is then identified for discussion. On the following day, a summary of the previous day’s discussion is provided and the MPC members individually explain their views on what policy should be. The Governor then puts to the meeting the policy which he believes will command a majority and members of the MPC vote. Any member in a minority is asked to say what level of interest rates he or she would have preferred, and this is recorded in the minutes of the meeting. The interest rate decision is announced at 12 noon on the second day.
Update (May 22, 2012)BOE Posen has been very outspoken during the last couple of weeks following the MPC Meeting. He started by saying that he voted for more stimulus before he voted against stimulus last week, to further stimulus “might be needed”, to BOE member should consider more stimuli in the future. Add to that sentiment, IMF today called UK out to consider further stimulus if situation warrants it, and considering the slightly worse than expected CPI release (3.0% headline and 2.1% core), it is likely that market may speculate some discussion over increasing the APT during last meeting to Posen possibly switched his vote back to more stimulus… Either way, GBP should be under pressure pre-news, although market may go either way after the release…
The Trade PlanWe will be looking at the vote count today but because of the current economic situation in UK and the uncertainty of the overall market view on Sterling, I’d recommend to sit on the sideline or follow me in the traderoom to trade this release. Due to the nature of this release, you need to have a newswire or audio service in order to trade it. If we see a steady market reaction after the release, it may very well carry over to the NY Session, therefore I’d wait for 5 minutes before even deciding on a trade. If market moves steadily, then I will use the double-fibonacci method and follow that trend.
BOOKS
ACH15® Discovery: always 100% won transactions in FOREX market! - florin iacob- EUR 115,34
EUR/GBP in a Nutshell: A Simple Guide on How to Trade the EUR/GBP in the Forex Market - Elena Sanchez - EUR 7,68
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