The BoE Minutes

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What Might Happen From the BoE Minutes?

To put it simply, more then 1 vote against the last raise will be negative for the GBP, but how might it go? Let's look at what happened the last time the minutes were released back on 10/18, which came 2 weeks after the BoE voted to hold the rates steady.

The minutes showed 2 dissenting votes (2 votes that voted for an increase). The market interpeted that as meaning that the BoE was sure to raise the rate at the next meeting on 11/9, which it did eventually do.

http://www.bloomberg.com/apps/news?...id=aGKegA0VPgu0

The pound did not spike up immediately after the realease, but it did go from 8677 on 10/18 all the way to a high of 9178 on 11/9 (the day the BoE announced the increase), about 500 pips. No, it wasn't a steady rise, but you can see what the minutes were worth to the market. The best part about this trade was that you could have stayed in it all the way to 11/9 without ever being in a negative position, although the profit varied.

The next BoE rate announcement is scheduled for December 7. Early Christmas present anyone?

The August 16 and September 20 B0E Minutes:


The August 16 minutes concerned the meeting on 8/9, when the BoE raised the rate to 4.75. This was a surprise, as the market did not expect the bank to raise the rate at this time.

The vote for the increase was 6-1 in favor of an increase. The dissenting vote was for keeping the rate unchanged and this vote was placed by the newest member. The market mostly interpeted this as meaning that the bank would not raise the rate at the September meeting, which it didn't. How did the pound move between the release of the minutes on 8/16 and the next rate announcement on 9/7?

The GBP went from a high of 9006 on August 16 to a low of 8650 on September 7. This trade was a bit harder though, because the pound did appreciate to 9091 on August 30. Still it was worth about 350 pips. Also, there was only one dissenting vote, which meant less assurance in the market of the bank's next move.

The meeting on September 7 was a unanimous vote to hold rates steady. This left market opinion open as to what would happen next as it interpeted the data as it was released. How did the GBP move between the release of the minutes on September 20 and the next announcement on October 5?

It opened @ 8883 on the 20th and closed @ 8859 the day before the announcement, with a high of 9072 on the 24th, basically returning to "equalibrium" the day before the meeting.

Very insightful stuff. I am very grateful that you are sharing these thoughts. You are making me reconsider what drives the markets.

(two thumbs up!)

Hmm..

I dont know if the periodic Highs and Lows for GBP is due to the rates or something else.

Now that we know 2 voted for a stay. Is history going to repeat itself?

Im personally short on GBP not because of the meeting but because its is top heavy.

you might regain some of those pips back today i think gbp/usd will start to go down now, i have no system to back that up, so don't take my word for it.

anyone else playing with the support and resistances im getting killed here....................... stupid GBP and 9100, hey maybe it will just drop like a rock and go to 8300 now that it hit 91 again

Here's the story and interpetation from BB:

http://bloomberg.com/apps/news?pid=...9qkDE0&refer=uk

The thing I'm not so certain of is that currently, the immediate interest rate expectations (holding the rate) is the same for the Fed and the BoE. Yes, the GBP is really getting up near the long time highs, but I'm not sure in this situation. I want to so some more research on this...