Intraday Market Thoughts

BoE Credibility & French Double Dip

by Ashraf Laidi
May 15, 2013 13:31

The BoE's inflation report came and went and so did the brief GBP rally after the report reiterated inflation will fall back closer to the Bank's 2% target in 2 years' time. But the BoE also raised the question about its own credibility for as long as CPI remains above 2%. EURUSD drops below 1.29 after France GDP remained in negative for the 2nd consecutive quarter and German Q1 GDP posted a weaker than expected +0.1% q/q following -0.7% in Q4. And with French CPI unexpectedly falling to 0.8% y/y from 1.1% y/y, expect more talk and hints of negative ECB rates. Risk aversion set in as USDCAD breaks 1.02. Last night's 6 new Premium trades on EURUSD, USDJPY and GBPUSD are in play, with 1 of 2 EURUSD nearing 1.2810 target from 1.2930 entry, both GBPUSD are in progress as does 1 of 2 USDJPY longs. Both CADJPY and 1 EURAUD also remain in progress as seen in the latest trades and charts in our Premium Insights.

Act Exp Prev GMT
CPI (EU norm) final (APR) (y/y)
0.8% 0.9% 1.1% May 15 6:45
CPI (EU norm) final (APR) (m/m)
-0.1% 0.0% 0.8% May 15 6:45
GDP (q/q)
-0.2% -0.1% -0.2% May 15 5:30
GDP s.a. (1Q) (q/q) [P]
0.1% 0.3% -0.7% May 15 6:00
GDP n.s.a. (1Q) (y/y) [P]
-1.4% 0.2% 0.0% May 15 6:00
GDP w.d.a. (1Q) (y/y) [P]
-0.2% 0.2% 0.3% May 15 6:00

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