The BoE MPC delivers its monthly base rate verdict at 12:00GMT. The majority view is that it will be held at 5.25%, although the risk of another 25bp hike to 5.5% cannot be ruled out, re: last month's unexpected quarter-point increase. NIESR believes the MPC should "err on the side of caution" and hike today.
The Times Shadow MPC voted 6-3 for no change.Touted sell interest at 1.9720, 1.9730/35 and 1.9750 may be rapidly tested, and sated, if the base rate is raised. 1.9730 was today's Asian session high. 1.9735 was yesterday's top. 1.9750 was last Friday's post-NFP high. 1.9917 (Jan 23, 15-year high) and 2.0000 are bull targets north of 1.9750. A raft of exotic option exposure is noted from 2.0000.
Expect some profit-taking on speculative long GBP positions if the base rate is held at 5.25%. This could depress sterling through 1.9658 (European morning two-day low) towards 1.9617 (Tuesday's Asian session top). Bear targets below include 1.9537 (Monday's base) and 1.9483 (Jan 31 floor). 1.9692 (today's Asian session base) marks the rebound top from 1.9658.
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