Investors eye BoE minutes

UK investors will look towards the BoE minutes released today, giving us a clearer picture on what was discussed at the August 2nd policy meeting. Currency trading this morning is relatively flat ahead of the release. We are expecting some discussions on the idea of an interest rate cut and the possibility of further QE after the incredibly disappointing Q2 GDP report.

Spanish newspaper la Vanguardia reported on Tuesday that Spain would most probably ask for a banking bailout by the end of this week. The Bank of Spain is preparing a formal request together with the Finance Ministry. The request is supposed to be sent to Brussels as soon as possible, allowing the EU to release the first tranche of the €30 billion in aid, necessary to prop up the country's nationalized banks. It was also made known on yesterday that 33% of all gross ECB borrowing in July was to Spain, totalling the amount of €402.2B, up from €365B in June.

U.S. economic data came out stronger than expected yesterday, the Dollar rallied against Japanese Yen and a basket of other currencies. The Dollar was supported as the positive news could potentially restrict the Federal Reserve to relax monetary policy in the near short-term.

Today’s Fundamentals.

09.30 GBP UK Average Earnings including Bonus (3Mo/Yr) (Jun) – Thisis predicted to increase from the previous market level 1.5%, which is likely to be a positive for the Pound.

09.30 GBP UK Bank of England Minutes

09.30 GBP UK Claimant Count Change (Jul) – Thisis predicted to fall from the previous market level 6.0K, a negative to the Pound.

09.30 GBP UK Claimant Count Rate (Jul) – Thisis predicted to stay at the same level 4.9% which will bring stability to sterling.

09.30 GBP UK ILO Unemployment Rate (3M) (Jun) -Thisis predicted to stay at the same level 8.1% which will bring stability to Sterling.

12.30 USD United States Consumer Price Index (YoY) (Jul) – This is predicted to decrease from the previous position of 1.7% to nearer the consensus of 1.6%, which will be a negative for the Dollar.

12.30 USD United States Consumer Price Index (MoM) (Jul) – Thisis predicted to increase from the previous market level 0.0%, which is likely to be a positive for the Dollar.

12.30 USD United States Consumer Price Index Ex Food & Energy (MoM) (Jul) – Thisis predicted to stay at the same level 0.2% which will bring stability to Dollar.

12.30 USD United States Consumer Price Index Ex Food & Energy (YoY) (Jul) – Thisis predicted to stay at the same level 2.2%, which will bring stability to the Dollar.

13.00 USD United States Consumer Net Long-Term TIC Flows (Jun) – This is predicted to decrease from the previous level of $55B to nearer the consensus of $20B, which will be a negative for the Dollar.

13.15 USD United Industrial Production (MoM) (Jul) – Thisis predicted to increase from the previous market level 0.4%, which is likely to be a positive for the Dollar.

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