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Commerzbank: what to expect from the BOE QIR?

Commerzbank advices to go into the Bank of England Quarterly Inflation Report with a small short EUR/GBP position and to increase the position if the BoE does surprise with a hawkish stance. 

"The key takeaway that investors will be looking for is whether the BoE have anything to say about the development of wage growth in the UK, which year to date has been disappointing. The BoE could argue that slow wage growth indicates that there is still a lot of slack in the UK labour market and as such this could justify a continuing loose policy stance". In this case British pound will extend the decline versus all the currencies. 

"The risk is that the BoE surprise the market and argue that they expect wage growth to increase", analysts add. If this happends, sterling can easily appreciate. In this case short EUR/GBP positions look especially attractive. 

Let us remind you that Great Britain releases a bunch of data on Wednesday:

08:30 GMT: Labor market data

09:30 GMT: BOE Gov Carney Speaks & BOE Inflation Report


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