Bridging the sterling gap

5 November, 2015

We have reached the day of reckoning in the UK today with the release of the MPC decision, together with the minutes to this decision and also the latest quarterly Inflation Report. Naturally this brings significant volatility risk to sterling, probably mostly from the Inflation Report side. Currently the market is not pricing in a tightening from the MPC until the latter half of next year. This does not tie in with the message from surveys of bank economists who think a move will come earlier and in the first half of the year. As such there is a decent chance that we do see a closing of this gap, thus market expectations brought further in line with thinking from elsewhere. This can be achieved from the Inflation Report and a projection of above target in 2 years time (as this is calculated on market interest rates). The other way would be via the press conference and some more hawkish comments from the Bank of England Governor Carney. Should this scenario pan out, then we could well see cable testing the 1.55 level short-term, with EURGBP eying the 0.70 level.

Sticking with monetary policy, comments from Yellen were giving upward momentum to the dollar yesterday, with Yellen describing a move at the December meeting as a “live possibility”. This is not a big change, but just a re-iteration of her previous sentiments. That said, the dollar did benefit, with risk appetite also marginally favouring the dollar as news emerged that the recent plane crash in Egypt could have been terrorist related. On this basis, USDJPY looks interesting as it tests two month highs at 121.75.


Source link  
Oil Inventories to Show a Draw

Expectations (Apr) are expected to be released with a prior reading of 16.7. This data has been weakening since a reading of 52.0 was recorded in...

Chances of RBA Rate Hike

NZDUSD bucked the trend overnight, as most other currencies managed to retrace some of their declines against the USD. The pair hit fresh...

Consumer Sentiment Index Close to Higher

US Fed Boston President Rosengren is due to deliver the keynote speech on the economic outlook, at the Greater Boston Chamber’s Economic Outlook Breakfast...


Chinese president soothes worries

With US Producer Prices data on the way this afternoon, and predicted to be largely as expected, the morning session will be dominated by central bankers...

Markets fall after more tariffs proposal

Friday's session is expected to be volatile, with Non-Farm Payrolls (13:30 UK Time) ahead and President Trump’s proposal for an additional $100B...

Korea gets exemption on steel tariffs

The US and South Korea have reached agreement on a Trade deal that comes with the added bonus for South Korea of a permanent exemption from...


EU Publishes List of Tariffs on US Goods

Over the weekend, the EU published a list of tariffs on US products in response to the US tariffs on Steel and Aluminium. The total value of EU tariffs...

Consumer Price Index and Housing Starts

Eurozone Consumer Price Index – Core (YoY) (Feb) will be released. The consensus points to an unchanged value of 1%. Consumer Price Index...

USD Weakens as Risk-Off Returns

Yesterday, the US announced Tariffs on Steel and Aluminium, which prompted an outcry from various global leaders and an acceleration in the...


In the past 24 hours Bitcoin has lost -3.63% and reached $8986.79. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -1.2229% and is now at $1.2229. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 18.81% and is now at $611.167. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM87%
3HYCMHYCM85%
4FxProFxPro84%
5FIBO GroupFIBO Group82%
6FXCMFXCM70%
7XMXM68%
8Fort Financial ServicesFort Financial Services67%
9Alfa-ForexAlfa-Forex66%
10HotForexHotForex66%
  


Share: