Bank of England

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Asian Session – Yen firmer as oil retreats after rise in US inventories

Posted on February 19, 2016 at 8:27 am GMT

The Japanese yen gained across the board in Asian trading on Friday as the oil rally fizzled out and investors turned to safe havens. The dollar slipped below 113 yen to touch a low of 112.70 before rebounding slightly to 112.92 yen. The euro also lost ground, dropping to a 2½-year low of 125.37 yen. Crude oil futures fell on Thursday after US inventories rose by more than expected for the week ending February 12. US oil futures fell below [..]

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UK inflation at highest in a year but core rate slows

Posted on February 16, 2016 at 11:03 am GMT

British consumer prices showed signs of accelerating in January as headline inflation rose to a one-year high.  Annual CPI edged higher to 0.3% in January, in line with estimates and up from December’s 0.2% rate. The month-on-month figure was weaker than expected though, recording a drop of 0.8% over the month versus estimates of a 0.7% drop. More significantly, the core rate of inflation, which excludes energy, food, alcohol and tobacco prices, eased by more than expected, rising at an [..]

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BoE lowers growth and inflation outlook but downplays talk of rate cut

Posted on February 4, 2016 at 3:37 pm GMT

The Bank of England downgraded its projections for the UK economy in its latest quarterly inflation report. It also decided to keep interest rates unchanged at a record low of 0.5% as expected. However, in a surprise move, the MPC’s lone dissenter, Ian McCafferty, who had been voting for a quarter point rate hike since last August, voted to keep rates on hold at today’s meeting. In its February report, the Bank lowered its growth and inflation forecasts for 2016-2018 [..]

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European Session – Dollar under more pressure after jobless claims, sterling rally halted after BoE

Posted on February 4, 2016 at 3:29 pm GMT

The US dollar weakened against most of its major counterparts except versus the British pound which was pressured by the Bank of England’s Inflation Report and the Governor’s press conference. The euro surged to its highest level since October against the greenback while the commodity-linked currencies also got a boost. The highlight of the day was the Bank of England meeting. While it was expected for the Bank to keep rates at 0.50% and QE unchanged, what surprised the markets [..]

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Asian Session – Oil jumps 8% as dollar slumps to 3-month low

Posted on February 4, 2016 at 8:21 am GMT

The US dollar slumped by 1.5% on Wednesday following comments from New York Fed President William Dudley who warned of tightening financial conditions. Speaking in an interview with MNI, Dudley said if the worsening financial conditions are still in place by the March meeting, the Fed would have to take it in consideration. He added that any further increases in dollar’s value could have “significant consequences” for the health of the US economy. Ten-year US treasury yields dropped to near [..]

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Week Ahead – RBA, Bank of England, US NFP and Chinese PMI on traders’ watchlist

Posted on January 29, 2016 at 3:44 pm GMT

The central banks theme will continue into next week as the Reserve Bank of Australia and the Bank of England meet. The closely watched manufacturing PMIs in China should give a fresh insight into the state of China’s struggling manufacturing sector. The all-important non-farm payrolls in the US will round up the week. Starting off the week on Monday are the January manufacturing PMI readings for China. The official manufacturing PMI is expected to show a marginal decline to 49.6 [..]

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Will Central Banks come to the rescue again?

Posted on January 26, 2016 at 11:53 am GMT

As risk assets have fared very badly at the beginning of 2016, there are hopes that some of the world’s top central banks will offer some more stimulus, which should help soothe investors’ nerves.  Although a correction in stocks should normally be welcome given their near 7-year continuous assent (since 2009) without a bear market (at least in the US), there is quite a lot of nervousness among policymakers about the fragility of the global economy.  Specifically, policymakers might become [..]

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Pound slumps on Carney remarks as markets ignore strong inflation data

Posted on January 19, 2016 at 3:27 pm GMT

The British pound was caught between two directions today after dovish comments from the Bank of England’s Governor contrasted the strong inflation data from earlier in the day. The Bank’s Governor, Mark Carney, reiterated his dovish view on Tuesday saying that he would like to see signs of notable progress in three areas before raising interest rates. They comprise of economic growth accelerating to above trend, domestic cost pressures picking up and core inflation moving towards the 2% target. Speaking [..]

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European Session – Euro hits $1.09 before retreating on ECB minutes, loonie hits new 12-year low

Posted on January 14, 2016 at 3:15 pm GMT

The euro rallied above $1.09 versus the dollar but trimmed gains after the ECB minutes were released late in the European session and the pair dipped in to the $1.08 handle. The December 3 ECB Meeting Account showed that some of the Bank’s policy makers wanted more aggressive easing, with a bigger cut to the deposit facility rate rather than the actual 10 basis point cut. Some also wanted bigger asset purchases than what was announced. What led to euro [..]

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Bank of England holds rates; expects inflation to rise more gradually

Posted on January 14, 2016 at 2:07 pm GMT

The Bank of England kept interest rates unchanged at 0.5% at its monthly monetary policy meeting today. The announcement was widely expected by the markets but some analysts were expecting for the decision to be unanimous by the Monetary Policy Committee (MPC) members. One policymaker, Ian McCafferty, had been voting since August 2015 for a 0.25% rise and was once again the sole dissenter at the January meeting. In its meeting minutes, which are released simultaneously with the decision announcement, [..]

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