Few predicted that the Bank of England would increase its key repo rate by 25 basis points to 4.75% at its regular monetary policy committee meeting on August 3. So it was no surprise that cable caught a very strong bid in the immediate aftermath of the decision. As the news was released at midday, cable moved up sharply from around 1.8725 to 1.8830.
A combination of factors appears to have come together and convinced many market players that the MPC’s decision was leaked in advance. There have been growing mutterings about how robust the security around the publication of market-moving data and information has been recently.
“If you want an idea for a story, how about the regular leaks that are occurring these days when there are important numbers or events,” a senior dealer based in London e-mailed Euromoney to say.
“Last month, the US employment number was leaked and published on Yahoo News a couple of minutes before 1:30. Yesterday, there was very suspicious price action in cable – it rallied about 60 points, just before the Bank of England announcement,” he added.
There is no doubt that there have been a couple of instances recently of US data being released slightly early.