More likely BOE waits FED

Investors' attention is drawn to the meeting of the BOE and new forecasts for the British economy.

Index PMI, which measures general business activity in the UK rose in October. Data link and an increase in GDP in the last quarter, surpassing the previous period by 0.1%. British economy creates the feeling that is gaining momentum. The UK Gilt 10 Year Yield also grew on a monthly basis to 1.99% (+21).

The lack of inflationary pressures in October, however, suggests that there is not available sufficient conditions to hurry to raise UK interest rates.

At 14:00 will be published decision, together with the outcome of the vote. If we look at the forecasts, expectations take place about three months after the similar step of the Fed. This, combined with the movement of the difference in yields on US 10Year-T-notes and 10Year-TIPS, reached maximum differentiation of 1.6%, with the view of Yellen and with development of the US labor market in a positive direction, the timing may be directed to the end of January - beginning of February 2016.

Investors and traders, however, are aware that the guiding principle in the behavior of central banks is surprising. In an unexpected change movements are large and almost unmanageable, but the probability is too small.

G.Hristov / Head of Fundamental Analyzes