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  
Market Sentiment Hinging On Progress In Brexit

The British parliament will vote on the Brexit agreement today at 18:00 GMT. In theory, this should be a simple vote, with a definite...

Market shows demand for yielding assets

The market shows demand for yielding assets, which in turn supports demand for the stocks and currencies of emerging markets. The main...

Yuan and Dollar as a weapon in trade wars

The US Nonfarm Payrolls on Friday could even be called boring: the report showed the preservation of a completely healthy labour market...


Disappointment with Fed and tariffs

Trump announced 10% tariffs on Chinese goods worth $300 billion since September 1, thus ending the US-China trade truce after disappointingly...

Fed pushes down stocks

Markets have started the week under pressure. Expectations that the Federal Reserve will cut interest rates by 50 points in July collapsed...

Gold updates new 6-years highs

Gold benefits from a combination of two factors: lower interest rates in debt markets and continuing hopes that the global economy...


Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...

Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...

  


Share it on:   or