Archived IMT (2008.11.05)

Equity revert to negative territory following a flurry of negative surveys on Eurozone PMI surveys and worse than expected declines in UK industrial production. Thursdays widely expected 50-bp rate cut from the European Central Bank will emerge along the Bank of England announcement, which could cut rates by as much as 75-bps. GBPUSD comes off its $1.6105 highs, failing to extend yesterdays gains after a fresh bout of negative diffusion indices and industrial production report. Whether the BoE opts for the base case scenario of 50-bp cut or the bigger 75-bps option remains the major question going into tomorrows rate decision. The CBI as well as some private economists are calling for a 100-bp cut to 3.50%. Sterling to remain on the downside, facing resistance at $1.62, with initial support at towards $1.5650 and $1.5300.