Morning Call

The Council of Mortgage Lenders December report estimates that gross mortgage lending in the UK was £17bn in December. The CML accounts for roughly 95% of all residential mortgage lending in the UK, so it is the primary barometer. This amount is unchanged from November, but is up 49% since December 2012. House prices in the UK have had wide coverage in the media, as there are concerns that the in some regions the price rises are unsustainable and could be forming a bubble. The capital…

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Mark Carney the Governor of the Bank of England spoke before the Treasury committee on Wednesday. He stated that he wasn’t concerned by the house price rises in the UK and expects the housing market to cool by 2016. The housing market, primarily in the South East, has seen considerable gains with fears of a bubble in pricing emerging. The record low interest rates (0.50%) combined with minimal new supply and increasing demand, has fuelled double digit percent rises per year in some reg…

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UK consumer price inflation (CPI) has slowed to the Bank of England’s target level of 2%, for the first time since April 2006. The December release from the Office for National Statistics showed that CPI had fell from 2.1% in November to 2.0% in December. The Bank of England targets 2.0% inflation, which has been consistently overshot since 2009. CPI is calculated from a basket of goods and services that is meant to represent household expenditure. The largest contributors to the…

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At 13:30pm London, the US employment report Non-Farm Payrolls for December is released. The monthly jobs report usually generates considerable volatility in the markets, due to the unpredictable nature of the release. The report is released by the US labour department and is for all goods, construction and manufacturing companies in the US, excluding farm and NGO employees. Following the better than expected US ADP report some banks have revised their estimate higher in recent days.…

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The Bank of England will announce at 12pm (London) if they are to maintain the current base rate of 0.50% and if they will adjust the current level of asset purchase of £375bn. The UK economic recovery is beginning to take hold, and there has been considerable speculation as to when the Lady of Threadneedle St. will raise base rates from their current record low. KPMG/REC: UK Jobs Growth Strongest Since March 2010 < 7% threshold here we come... — Joe Bond (@Joe_T…

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The Federal Open Market Committee (FOMC) minutes will be released today at 7pm (London). Traders are awaiting the release of the December meeting minutes, as it was the first time that the Fed began tapering their monthly asset purchases, a reduction of $10bn for this month. Prior monthly purchases had totalled $85bn, with a reduction to $75bn for this month. The flooding of the markets with cheap money, fuelled by central bank QE, and now the removal of the stimulus have been key them…

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The Markit/CIPS UK Services PMI, came out at a six-month low for December at 58.8, dipping from Novembers buoyant 60.0. Analysts had expected the release to be between 60.0 and 60.3, above 50 is expansion. The figure though below forecasts is a positive release, though the concern is that this is part of a larger trend. Last week both manufacturing and construction PMIs fell from the previous months. Full Markit/CIPS UK Services PMI Release George Osborne Chancellor George…

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The final trading day of the year is upon us and the end of 2013 is in sight. Trading volumes are expected to be relatively low until after the Christmas/New Year lull. The year in the financial markets, will most likely be remembered for the positive of exiting financial crisis mired by scandals of fixings in a variety of markets. What to expect in 2014? The UK and US economies are predicted to grow, unemployment to trend lower and the timing of tightening economic policy…

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Following the Christmas trading break and prior to the New Year, liquidity is thin as many are away from their desk. In the FX market, the limited participant’s leads to reduced liquidity, movement in the majors can be more sporadic than usual. Spreads are slightly wider in the institutional market to reflect the fewer traders at their desk and limited risk appetite. (This doesn’t affect Abshire-Smith trading accounts with fixed spreads). In the FX market USD has been on th…

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Here is the Abshire-Smith trading holiday schedule for the VertexFX 10 and MetaTrader 4 platformsover the holiday period. All effort has been made to ensure that these trading hours are correct, and the information is accurate at time of release. However there is a small possibility that these hours could change for reasons beyond the Abshire-Smith’s desks control. If you need any assistance please contact us (dealing@abshire-smith.com). Merry Christmas and Happy N…

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On Wednesday evening (London) the FOMC completed their two day meeting and announced the Fed would start tapering the amount of assets purchased each month. Analysts and market commentators were mixed as to their views, with the minority expecting Bernanke to act in December with the majority believing the Fed would wait until January or even March. The release came at 7pm London that the Federal Reserve is reducing the current level of asset purchases to $75bn from the previous monthl…

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The FOMC concludes their two day meeting today and will announce if they will reduce their monthly asset purchases from $85billion ($40bn MBS and $45bn Treasury’s). It is the final meeting for Ben Bernanke the current Chairman of the Fed, with his successor expected to be hawk Janet Yellen. At 7pm GMT the interest rate, economic projections and most importantly the level of asset purchases will be announced. In the Bloomberg survey of economists, 35% expect the Federal Reserve to…

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Bank of England Governor Mark Carney has warned the “great risk” of unwinding the current quantitative easing programme. The stimulus was headed by his predecessor Mervyn King, a mixture of ultra-low interest rates and QE. Carney was speaking to the House of Lords, mentioning the risk of the Federal Reserves tapering of their QE, and how the BoE might execute its unwind. This is a difficult task, as the UK economy is staging a recovery, though there is concern increasing in…

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The US Federal Reserve currently purchases $85 a month of assets, combined with low interest rates to help stimulate economic growth. The markets speculation as to when the Fed will begin to Taper, this programme of quantitative easing has some believing it could be on Wednesday at 2pm. The main focus for traders this week, before the holiday lull, will be does Bernanke start tightening at his final meeting as Chair of the Fed, before Janet Yellen takes over. The markets are awash with…

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The timing of the Fed’s Taper has been a recurring theme, that has been a key driver of price action. In January the current Federal Reserve Chairman Ben Bernanke, and will most likely be succeeded by Janet Yellen. Analysts and traders have been attempting to predict the Federal Reserve’s taper timing, however the messages from the committee has been difficult to disseminate. Each of the Fed members (voting and non-voting) speeches and interviews have been picked through for any…

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