News Headline Summary

GBP and Gilts remain underpressure, as market participants digest comments from BoE's King who said the BoE will look through CPI to support recovery...

- King also added that while the BoE is ready to provide more stimulus, there are limits to what monetary policy can do and that more targeted measures must complement monetary policy.
- GBP also underpressure in reaction to comments from King who said that investors view GBP depreciation as more likely than appreciation.

Reaction details (11:18)

- Since the initial announcement at 1030GMT, GBP/USD has lost a full point and trades at a fresh 6-month low after stops at 1.5570 were tripped. Option barrier seen at 1.5550.

Analysis details (11:12)

- Comments on inflation from King are very similar to recent rhetoric from Carney who hinted on flexible inflation targeting which in turn implies further monetary loosening.
- Short-sterling strip bear steepened since the initial release. Of note, King said that the MPC need to think about how to cope with rate normalization.

13 Feb 2013 - 10:49 - Fixed Income Bank Speaker - Source: RANsquawk

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