UK MPC Meeting Minutes 10/21/09

MPC, Monetary Policy Committee, from Bank of England (BOE) will be releasing their meeting minutes over the Rate Decision meeting held 2 weeks ago along with the actual vote count over the rate decision and possibly the Qquantitative Easing measures (QE).  Last rate decision MPC decided to leave both rates and their QE unchanged, which provided an immediate short-term (and short-lived) support for the British Pound.  This meeting minutes, however, will probably have more profound effect on the British Pound than its predecessors because of the sharp gain in GBP last week, which was attributed to none other than the rumor to the possible termination of the QE program, and solid proof will be provided by official sources today.

Therefore, we’ll be concentrating on the announcement over the QE program and its future direction.  If the meeting minutes failed to mention any possible exit strategy over the QE, expect to see GBP drop sharply… If the meeting minutes failed to provide immediate actionable direction, short of confirming the rumor of ending the QE, expect to see GBP drop.  As a matter of fact, unless MPC members come out and scream “Death to QE!”, I think we’ll see a weaker GBP.  Remember, the sharp gain of GBP has put both USD and JPY at over 800 pips of loss each against Sterling, and unless there are strong supporting evidences for this rumor, classic Buy on rumor Sell on news scenario will play out.

The rumor started with BOE Paul Fisher in a recent interview with the Financial Times where he said policy makers would prefer to pause their asset purchases to give themselves more options down the line; but ironically, over the past weekend another BOE official, Adam Posen, stated that BOE will continue its BOE program with another media outlet during an interview.  Therefore, we’ve got enough arguments for both sides, and today’s Minutes will settle it. 

I’ll be trading this release live as always do and I’ll post my results afterwards.  This trade is for the more advanced trader as we’ll have to deal not only with interpreting the actual minutes but also reading market sentiment, therefore unless you’ve traded this before, maybe it is better to skip it.

Related posts:

1. UK MPC Meeting Minutes 08/19/09
2. Australia Monetary Policy Meeting Minutes 10/19/09
3. US FOMC Meeting Minutes 09/02/09
4. UK BOE Official Bank Rate Decision 02/04/10
5. Forex Analysis For UK BOE Interest Rate Decision 08/05/10
6. BOE Official Bank Rate Decision Strategy 06/10/10
7. BOE MPC Official Bank Rate Decision 10/08/09
8. BOE Official Bank Rate Decision 04/08/10
9. UK BOE MPC Official Bank Rate Decision 11/05/09
10. UK Retail Sales m/m 10/22/09

Tagged as: Asset Purchases, Bank of England, bank of england monetary policy committee, BOE, British Pound, Evidences, Exit Strategy, Financial Times, Forex, Forex News, Fundamental News, fundamental outlook, GBP, GBP/JPY, GBP/USD, Inflation, Interest rate, interest rate decision, JPY, Key Interest rate, Matter Of Fact, Meeting Minutes, Minutes, monetary policy, monetary policy committee, MPC, MPC Meeting Minutes, Paul Fisher, pips, Posen, Predecessors, Profound Effect, Qe, Resul, UK, United Kingdom, Vote Count