Cable tumbled 75 pips Monday as dovish BoE....>

CABLE: Cable tumbled 75 pips Monday as dovish BoE rhetoric set the scene for the

reception of worse than expected UK activity indicators. The weekend saw MPC

member Vlieghe note that he could back an interest-rate cut, if there are no

signs of improvement in the upcoming data. Participants watched poor GDP, m'fing

& industrial production numbers bearing in mind these comments.

- Vlieghe's comments came as his MPC colleagues Saunders & Haskel are already in

for a rate cut, while last week Tenreyro said she could join her dovish

colleagues, should sluggish growth persist. Last week's comments from Gov Carney

were also read as dovish (although they were more ambiguous than Vlieghe's).

- Implied probability of a 25bp rate cut from the BoE this month increased to

47.6% from the 23.1% seen on Friday.

- GBP/USD has settled near Monday's close, last trades +6 pips at $1.2995. Bears

look for a breach of the key support from the low of Dec 23 at $1.2905. Bulls

need to reclaim $1.3000 before taking aim at the $1.3020 50-DMA.

- UK inflation data and comments from BoE's Saunders are due Wednesday, while

retail sales come out on Friday.