UK rate hawks touting another 25bp base rate hike to 5.25% next February have elicited a boost from October's CBI industrial orders balance. This leapt to minus 6, from minus 20 in September. GBP/USD rose to test 1.9000 offers after the 11:00GMT disclosure of the much better-than-expected number.
1.8996 was today's Asian session peak, scaled on the back of decent size USD selling from a US investment bank. The bid battle for Anglo-Dutch Corus is also lending support to the pound. According to The Independent, Brazilian steel maker CSN may be in a position to table a formal GBP 4.5bn offer for Corus as early as the middle of next week. Last Friday, CSN announced that it might trump a 455p-a-share offer for Corus from Tata of India with a bid worth 475p-a-share.
This week's key UK event risk is tomorrow's 09:30GMT publication of minutes from the November 8/9 BoE MPC meeting. These are expected to reveal that the UK base rate was hiked by 25bp to 5.0% by an 8-1 vote, with ultra-dove David Blanchflower the likely dissenter.
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