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What surprises could see a market reaction?

BOE
  • The biggest wildcard is probably the inflation forecasts: The 3-year probably has the biggest potential to move markets here. Analysts generally look for around 1.7%. A 1.8% projection probably wouldn't move things too much in isolation, but a 1.9% would be higher than the market is looking for as it would be no downgrade relative to February despite the market repricing since then. On the flip side, a 1.6% (or lower) projection - which some analysts do expect - would likely trigger a dovish market reaction. For the 2-year, 1.9%/2.0% is generally expected. 1.8% would be dovish as it would appear to point to a more imminent need to cut. Whereas 2.1% or higher would seemingly push back on the urgency.
  • On the guidance: If there are no changes, this would probably see a small hawkish reaction (particularly if accompanied by an 8-1 vote, absent any inflation forecast surprises). Explicitly pointing to a cut would be clearly dovish while more vague language about a cut would still be dovish (even with a 8-1 vote split).
  • And if we see anyone other than Dhingra and Ramsden vote for an immediate cut (even if it is a 7-2 vote split and Ramsden votes for unchanged rates), we think that would trigger a dovish reaction.
  • MPC decision is due in 15 minutes. MNI Preview here.
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