• BoE unchanged, votes 8-1 to hold rates
• UK 2-Yr Gilt yield falls by 7bps.
• GBP / USD back below 1.2750.

​ :

The BoE left the Bank Rate untouched today but MPC voting left a dovish feeling post-decision. At the last meeting, six out of nine members voted to keep rates unchanged, two voted for a rate hike , and one member voted for a rate cut. Today’s vote, eight unchanged and one cut, suggests that rate cuts are nearing.

The probability of a 25 basis point UK rate cut at the June meeting rose to over 65% after the announcement, the highest level seen in recent weeks. While the May meeting may be slightly too early for the BoE to start cutting rates, the June meeting is live.

The interest-rate sensitive UK 2-Yr gilt shed a further 7-8 basis points on the announcement, pushing the yield further lower. The late-December triple yield low of around 3.96% may soon come under pressure.

UK 2-Yr Gilt Yield

GBP/USD is around 25 pips lower after the decision and trying to reclaim the 1.2750 area. The US dollar is weak today after last night’s FOMC meeting reaffirmed the Fed’s outlook for three 25 basis point rate cuts in the US this year.

GBP/USD Daily Price Chart

data shows 47.11% of traders are net-long with the ratio of traders short to long at 1.12 to 1.The number of traders' net long is 14.32% lower than yesterday and 2.63% lower than last week, while the number of traders' net short is 9.93% higher than yesterday and 13.48% lower than last week.

We typically take a contrarian view to crowd sentiment, and