BOE to set dovish tone

8 October, 2015

Sterling’s recovery yesterday may be scuppered by the Bank of England today after it spiked on the back of the release of industrial and manufacturing data that reached a four year high. The increase in industrial and manufacturing production is being seen as a bit of an anomaly as the sector continues to suffer from a strong pound which today stands 3% higher than it did a year ago and 15% higher than four years ago against a basket of other currencies. With growth in the third quarter looking to come in lower than had been expected the BOE is going to tone down the prospect of interest rate hikes, but now the bigger debate is whether the BOE will actually commence monetary tightening before the Fed. As we mentioned in yesterday’s note it has always been investor’s expectation that the Fed will move first then the BOE. But the recent change in dynamics has brought that into question and Mark Carney will what to clarify that the BOE is totally interdependent of the Federal Reserve and that the BOE’s decision to raise rates will not be determined by any other central bank monetary policy.

Later on today we see the release of the FOMC minutes which could very easily lead to an increase in volatility and at the same time Mark Carney will appear on a panel debating the global economy.


Source link  
Economic calendar is relatively light

Today is Martin Luther King’s Birthday, which is a Bank Holiday in the United States. As a result, the Economic Calendar is relatively light today...

US Tax Bill passes

On Wednesday, the US Senate approved the tax bill 51 for and 48 against, while the House of Representatives gave it final approval, passing it for the second time in two days after...

US dollar 'treading water'

USD is treading water ahead of the expected enactment of President Trump’s tax bill. The initial euphoria of lower corporation tax, that many...


CB Monetary Policy Unchanged

Thursday saw the latest Monetary Policy Committee (MPC) report from the Bank of England. The BoE stated that further modest increases...

No Surprises as Fed Raises Rates

The Federal Reserve, as expected, raised its benchmark interest rate by a quarter of a percentage point, to a range of 1.25% to 1.5%. The latest hike...

CB meetings dominate the week

With no impactful economic data releases on the calendar today, the markets are focusing on a plethora of Central Bank meetings scheduled...


No Surprises from BoC & ADP

In an unsurprising move, the Bank of Canada decided to hold its benchmark lending rate at 1%, after two small hikes earlier in 2017. The BoC stated...

Moderate Gains for USD

On Monday, the US Commerce Department released Factory Orders data for October, indicating that the continued strength in the Manufacturing...

OPEC Extends Output Cuts

On Thursday, OPEC (Organization of Petroleum Exporters) and non-OPEC producers led by Russia agreed to keep output cuts until the end of 2018...

  


Share: