Pound Dives as BoE's Bailey Suggests Aggressive Rate Cuts Possible
Action Insight Mid-Day Report 10-3-24 |
Pound Dives as BoE's Bailey Suggests Aggressive Rate Cuts Possible |
Sterling fell sharply today after BoE Governor Andrew Bailey surprised markets by suggesting the possibility of aggressive rate cuts in an interview with The Guardian. Market expectations quickly adjusted, with swaps now fully pricing in a 25bps cut in November. The odds of a second 25bps cut in December also surged to 70%, up from 40% just a day earlier. However, it is crucial to note that while being the face of BoE, Bailey's comments reflect just his personal stance, and BoE’s MPC is known to be divided. The narrow 5-4 vote in favor of the 25bps rate cut back in August highlighted these internal divisions, and future decisions could be just as close. Greater clarity on BoE’s direction will emerge when other influential members of the MPC, such as Deputy Governor Dave Ramsden and Chief Economist Huw Pill, share their perspectives.... |
EUR/GBP Mid-Day Outlook Daily Pivots: (S1) 0.8319; (P) 0.8329; (R1) 0.8335; More... EUR/GBP's strong rebound and break of 0.8370 resistance confirms short term bottoming at 0.8309. Intraday bias is back on the upside. Decisive break of 38.2% retracement of 0.8624 to 0.8309 at 0.8429 will pave the way to 61.8% retracement at 0.8504 and possibly above. On the downside, below 0.8370 resistance turned support will turn intraday bias neutral first. | |
GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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00:30 | AUD | Trade Balance (AUD) Aug | 5.64B | 5.50B | 6.01B | 5.64B | 06:30 | CHF | CPI M/M Sep | -0.30% | -0.10% | 0.00% | 06:30 | CHF | CPI Y/Y Sep | 0.80% | 1.10% | 1.10% | 07:45 | EUR | Italy Services PMI Sep | 50.5 | 51.2 | 51.4 | 07:50 | EUR | France Services PMI Sep F | 49.6 | 48.3 | 48.3 | 07:55 | EUR | Germany Services PMI Sep F | 50.6 | 50.6 | 50.6 | 08:00 | EUR | Eurozone Services PMI SepF | 51.4 | 50.5 | 50.5 | 08:30 | GBP | Services PMI Sep F | 52.4 | 52.8 | 52.8 | 09:00 | EUR | Eurozone PPI M/M Aug | 0.60% | 0.30% | 0.80% | 0.70% | 09:00 | EUR | Eurozone PPI Y/Y Aug | -2.30% | -2.40% | -2.10% | -2.20% | 12:30 | USD | Initial Jobless Claims (Sep 27) | 225K | 220K | 218K | 219K | 13:45 | USD | Services PMI Sep F | 55.4 | 55.4 | 14:00 | USD | ISM Services PMI Sep | 51.5 | 51.5 | 14:00 | USD | Factory Orders M/M Aug | 0.10% | 5.00% | 14:30 | USD | Natural Gas Storage | 59B | 47B |
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