Trading the BOE interest rate decision – TDS

Analysts at TD Securities offer a sneak peek at what to expect from the Bank of England (BOE) interest rate decision due on ‘Super Thursday’.

Also read: BOE Rate Decision Preview: Bailey to follow Powell’s footsteps with a dovish hike

Key quotes

“We expect a relatively dovish 50bps hike, alongside a very cautious tone on the outlook. Inflation is likely to be revised up (esp near-term), but at the same time the forecasts will show slack opening up and inflation falling below target by 2025.”

“A cautious hike should support our view of GBP rates outperformance vs. EUR. Meanwhile, details on QT argues for cheapening of the 10y ASW from their current rich levels.”

“Buy the rumor, sell the fact. With the BoE expected to caution against extrapolating 50bps hikes and some dissenters, GBP may not get much lift from this meeting. External factors are more likely to be relevant.”