There are a number of potentially market-moving UK event risks this week, inclusive of tomorrow's disclosure of February inflation figures, Wednesday's publication of minutes from the March 7/8 MPC meeting, Gordon Brown's same-day budget, and Thursday's February retail sales numbers. UK CPI is forecast +2.7% y/y, unchanged from January, from an 11-year peak of 3.0% in December.
2.0% is the BoE's target level. The MPC minutes are expected to reveal that the UK base rate was held at 5.25% by a 7-2 vote, with Besley and Sentence dissenting in favour of another 25bp hike. Cable ran into resistance just shy of touted offers at 1.9460 during the European morning, after tripping stops above 1.9435 (today's Asian session peak).
Friday's two-week top of 1.9505 is a resistance level north of 1.9460. Sterling support points include 1.9400 and 1.9381 (today's Asian session base). March's NAHB housing market index will be revealed at 17:00GMT. Forecast: 38, from 40 in February. This week's key US event risk is the two-day FOMC meeting, which begins tomorrow (Tuesday).
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