The BOE minutes unveiled that the decision to keep the size of the asset purchase program at 375B pound at the February meeting was not unanimous as Governor Mervyn King, Paul Fisher and David Miles dissented. They favored increasing the size of the asset purchase program by a further 25B pound to a total of 400B pound to boost the economy. The central bank also indicated the possibility of using measures other than asset purchases to boost the fragile economy in the future. The pound weakened further while UK stocks and gilts rebounded after the report amid expectations of more easing measures later in the year.
The Germany bond auction received only weak response. Demand for the 4.4B euro sale of 10-year bund was lower than previously expected as investors refrained from taking big positions before Italian elections during the weekend. They also await more economic data for getting a sense of the Eurozone’s outlook. In Spain, the government imposed yield ceiling to bonds as wants regions to pay a premium no higher than 100 basis points more than sovereign bonds.
On the dataflow, the UK’s jobless claims slipped -12.5K in January while the decline in December was revised up by -15.8K. Claimant count rate dipped -0.1% to 4.7% in January. The ILO 3-month average unemployment rate in December was 7.8%, up from 7.75 a month ago. The US housing starts probably slipped to 925K in January from 954K a month ago. Building permits might have risen to 920K from 903K in December. In the Eurozone, consumer confidence might have improved modestly to -23.1 in February from -23.9 in January. The US' FOMC minutes would probably unveil more opinions opposing the continuation of the Fed's QE program.
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