Rates lower for longer

7 October, 2015

In the absence of any meaningful economic data today investors are looking ahead to tomorrow’s Bank of England interest rate policy and FOMC minutes. For some time now the markets have been of the thinking that the impending monetary tightening cycles from the Federal Reserve and BOE will move neatly one after the other, with the Fed hiking in either September or December this year and then the BOE soon after that. This consensus has now been thrown out the window following the recent poor run of economic data as investors accept that interest rates are set to stay lower for longer. For many this is hard to fathom considering that a commencement of the monetary tightening cycle from one of either the Fed or the BOE has been much anticipated throughout this year. We are now seeing plenty of evidence to suggest that for both these central banks this tightening cycle isn’t set to start until well into 2016 and who moves first is open to debate. Tomorrow’s MPC voting and BOE minutes will be of great interest and an absence of any more hawks joining Ian McCafferty in his calls for a rate hike could put further downward pressure on sterling.

Today does see the release of UK industrial and manufacturing production where both are set to rise 0.3%. Considering the shock figure from Germany already this morning investors shouldn’t be surprised if they see a worse than expected number.


Source link  
Markets look to Central Bankers

Asian Equities traded higher on Tuesday approaching near two-year highs on Tuesday as USD strength helped exporters...

Global Economic Optimism Continues

Global equities moved higher on Monday as optimism continued to improve on global economic growth. However, USD...

BOJ Monetary Policy Remains Steady

The Bank of Japan maintained their monetary policy on Friday whilst upgrading their assessment of private consumption...


Final Confirmation for a June Rate Hike

The crucial US labour market data for May will be released today, June 2nd at 13:30 BST. It includes non-farm payrolls...

GBP Under Pressure

The Brexit negotiation process is one of the focuses of the upcoming UK election. Although the Conservative Party has pledged a smooth and orderly...

Oil Slumped Post OPEC Extension

On Thursday, OPEC announced that the existing output cut agreement will be extended for an additional 9 months...


USD Bounces From Month Low

Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion...

Dollar index hit a new low

The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211...

USD Hit Post Election Low

To date the dollar index has almost given up all of the post presidential election rally...

  


Share: