UK CPI - Comes out lower as expected, risk-on rally continues

The Bank of England has been forecasting Inflation to come down this year. They have been saying this since inflation began to get very high last year, and it was the reason they did not go ahead and increase Interest Rates when things were looking a bit better in the middle of last year. And they made the right choice not to as when things got bad again toward the end of 2011 they actually raised the Asset Purchase Facility (the APF) by 75 Billion to 275 Billion. Which basically is Quantitative Easing or Printing Money. Although there was a wider range of estimates this month than last month (a 1.0% range compared to 0.4% in December 2011), the analysts like last month got it right and the main figure, the Headline CPI YoY came out at +4.2% as expected.

Here are the figures:

UK DCLG UK House Prices (YoY)
Actual: -0.3% Prior: -0.4% No Revisions

UK CPI (MoM)
EStimates: Median +0.4% Average +0.4% Range -0.2% to +0.8%
Actual: +0.4% Prior: +0.2% No Revisions

UK CPI (YoY)
EStimates: Median +4.2% Average +4.2% Range +3.6% to +4.6%
Actual: +4.2% Prior: +4.8% No Revisions

UK Core CPI YoY
EStimates: Median +3.0% Average +3.0% Range +2.8% to +3.2%
Actual: +3.0% Prior: +3.2% No Revisions

UK Retail Price Index
EStimates: Median 239.1 Average 239.1 Range 238.5 to 239.6
Actual: 239.4 Prior: 238.5 No Revisions

UK RPI (MoM)
EStimates: Median +0.3% Average +0.3% Range +0.1% to +0.7%
Actual: +0.4% Prior: +0.2% No Revisions

UK RPI (YoY)
EStimates: Median +4.7% Average +4.8% Range +4.5% to +5.2%
Actual: +4.8% Prior: +5.2% No Revisions

UK RPI Ex Mort Int.Payments (YoY)
EStimates: Median +4.9% Average +4.9% Range +4.7% to +5.2%
Actual: +5.0% Prior: +5.3% No Revisions

The GBPUSD forex pair actually rallied about 15 pips after the release as seen in this 10 second chart:

but this was probably just a continuation of the rally seen overnight since the better GDP, Retail Sales and Industrial Production figures out of China. However during the European Morning Cable again was the laggard as while the AUDUSD and EURUSD were near their respective highs for the day, the GBPUSD forex pair was 35 pips or so off its highs. The pair was frontrun ahead of its Daily R2 pivot but retraced back down to its R1 daily Pivot heading into the UK CPI news release. There is also the 50% of last weeks 1.5500 high to 1.5233 low at 1.5366. Here is a 5 minute chart which shows these levels:

Finally a 30 second chart of half hour or so leading into the 9:30 GMT (4:30 EST) release, which shows Cable bouncing off this R1 a few times heading into the release, and it makes a slightly lower low at this level right when the data hit the wire which punctuates the swing low and lead to a nearly 1.5400 the figure: