Morning Call

The financial markets movement this week is likely to be dominated by the aftermath of the downed Malaysian Airways flight MH17 and the ongoing ground operation by Israeli troops in Gaza. The Ukrainian/Russian conflict was heightened after the passenger jet was downed in Ukraine, with global leaders quick to criticise, yet definite facts as to who is to blame are unclear. The likelihood of further sanctions to Russian countries, as a means of intervention unnerves investors.…

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The Office for National Statistics has released the monthly unemployment figures, with the headline UK ILO Unemployment figure for May was in line with expectations at 6.5%. This is the lowest unemployment rate since October to December 2008; this was just before a significant amount of redundancies began. Jobless claims fell by 36,600, which is higher than the estimated reduction of -27,000 jobs. Wage Data The disappointing part of the data was the wage growth, average earnings…

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The Office for National Statistics released the inflation data for June, with CPI increasing to 1.9%. Since the beginning of 2012, the CPI level had fallen from over 5%, down to 1.5% in May, which some analysts argued would reduce the pressure on the MPC increasing interest rates. The unexpected increase in inflation has put an immediate bid into sterling in the FX markets. Traders have bought Sterling on the basis that the potential first hike of interest rates will be sooner than the BoE&r…

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The Bank of England announced at 12:00 (London) that the Monetary Policy Committee has voted to leave interest rates unchanged at 0.50% and asset purchases at £375bn. This was the expectation of analysts leaving the announcement a near non-event, traders focus will be on the minutes for the meeting that will be released on the 23rd July and next month’s quarterly inflation report. Both will give traders an opportunity to gauge the MPC’s outlook for the all-important timing…

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UK manufacturing figures released on Tuesday by the Office for National Statistics, disappointed investors as they were well below expectations. Sterling has been riding high against the US dollar and Euro, has traders have digested the strong macro data, with the expectation the Bank of England will raise rates early than their current prediction. Today’s release unexpectedly missed forecasts which led to Sterling being offered in the FX markets, following last week’s multi-year…

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It’s the 4th July, which is a public holiday in the US, which has left the European/US trading sessions subdued with minimal data points. On Thursday there was the unusual occurrence of a Thursday release for the US employment report, Non-Farm Payrolls, released alongside, initial jobless claims, continuing jobless claims and Draghi’s ECB press conference. US equity markets were buoyed by the strong employment figures, with the headline number of jobs added being +288,000…

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Today is a rarity for the financial markets; the US employment report (Non-Farm Payrolls) is being released on a Thursday, not the first Friday of the month. This is due to the Friday being Independence Day (July 4th) in the US, a national holiday. The economic release coincides with the ECB press conference; US average earnings, US initial and continuing jobless claims. Each of these data points should impact the markets, with all being released together; it could lead to confusion an…

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Sterling has traded to the highest level since 2008 on Tuesday against the US dollar, following better than expected macro data. UK Manufacturing PMI for June at 57.5, up from 57.0 in May, a number above 50.0 states expansion. The other highlight of the report was job creation at a 39-month high adding to the positive sentiment for the UK economy. RT @World_First: UK Manufacturing PMI (June) = 57.5 vs 56.8 expected and 57.0 previous > Q2 growth surely over 1% — Mike Bi…

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During a press conference held by the BoE yesterday, Governor Mark Carney issued details of their planned Financial Stability Report announcing the implementation of a series of prudent macro tools intended to help slow down the ever inflating recent UK house price bubble and to prevent an unsustainable build-up of consumer debt. Full details of the Report can be found here: http://www.bankofengland.co.uk/publications/Documents/fsr/2014/fsrfull1406.pdf Over the past four ye…

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The Bank of England released the minutes of the Monetary Policy Committee meeting that was held on the 4th and 5th of June 2014. The key line from the BoE minutes is that the MPC members were surprised at the limited expectation from the market, that the MPC would raise rates before the end of the year. relatively low probability of 2014 bank rate rise priced in by markets "somewhat surprising Bank of England voted 9 – 0 to leave interest rates unchanged at 0.5…

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We have seen significant moves in cable over the last couple of days; the pound climbed over 200 points against the US dollar following Governor Mark Carney’s address at the annual Mansion House speech on Thursday evening. Carney gave his biggest hint yet that interest rates could rise before the turn of the year, saying ‘there’s already great speculation about the exact timing of the first rate hike in the UK and this decision is becoming more balanced. It could happ…

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Guest Blog, Abshire-Smith Iraq Country Manager 12/06/2014 14:30 (London) Iraqi forces sought to check the rapid advance of Islamist militants who had seized major cities, including Iraq’s second largest city, and Saddam’s hometown of the Tikrit. What has concerned energy markets is the control of one of Iraq’s largest refinery Beiji which produces 310,000 BPD. However State media has just reported that Iraq’s Oil Minister Abdul Kareem Luaibi said that the…

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The Office for National Statistics (ONS) released their Labour Market statistics for the UK at 9:30am on Wednesday morning. The headline 3-month unemployment rate for February - April 2014 beat expectations, being released at 6.6%, below expectations of 6.7% and the previous release of 6.8%. The UK government will be very pleased with these figures, reinforcing their plan to bring the UK economy back on track, however the opposition is likely to focus on the wage growth. Average earnings gro…

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