UK: T-1 to Super Thursday as bullish sterling sentiment quietly growing - ING

With sterling going into the Aug BoE Super Thursday meeting on a mildly bullish high, Viraj Patel, Research Analyst at ING suggests that they do think the downside risks from an on-hold MPC – with a 6-2 vote split – are much higher.

Key Quotes

“The latest manufacturing PMI reading is likely to have fuelled lingering hopes of a hawkish BoE surprise tomorrow and a firm construction PMI release today could do the same. But in the absence of these figures spurring a sudden wave of optimism within the MPC, we struggle to see the Bank following through with a surprise hike tomorrow. Admittedly, it would be ‘sentimental’ were the Bank to reverse its post-Brexit 25bp rate cut exactly one year-on – but a ‘one -and-done’ message wouldn’t actually drive GBP much higher from these levels. We would expect GBP/$ to top out around 1.34 (next key resistance at 1.3280).”