Morning Call

As expected the MPC have left interest rates on hold at 0.50% and quantitative easing at £375bn. Carney is now under pressure following the recent better than expected data points from the UK, pointing to a recovery that it is gaining traction. The Governors Forward Guidance, of ultra-loose monetary policy seems to be being ignored by the markets, as traders believe that the bank will be forced to raise rates earlier than forecast. The minutes of the meeting will be publish…

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Data released by Markit/CIPS showed that activity in the dominant service sector rose at the sharpest rate since December 2006. The strong recovery for the UK seems to be gaining traction, which is a positive sign as we reach the 5-year anniversary for the collapse of Lehman Brothers. It is important to note that Carney’s forward guidance stipulates that the Bank of England will hold rates at record lows until employment falls to 7%. Employment is usually a lagging indicator of e…

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Early in the session the Gold and Oil prices spiked following reports that the Russia's missile early warning system had spotted two launches heading towards Syria. However it was actually an unannounced test from Israel. Markets calmed following the Israel admission, though Gold is currently trading around the $1400 level. Tensions in the region are high amid concerns of international intervention in the Syrian civil war, following revelations of the use of chemical weapons.…

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The Reserve Bank of Australia (RBA) left the interest rate on hold at 2.5% ahead of the government elections on the 7th September. The Aussie dollar has weakened significantly recently as traders have tried to front run the tapering of bond purchases by the US Federal Reserve. Governor Stevens highlighted the depreciation of over 15% for the AUD since April, but reiterates the currency remains high. The majority of analysts and economists had tipped the central bank to leave rates unchanged…

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The first trading day of September and the final quarter of 2013 begin. The 5 year anniversary of collapse of investment bank Lehman Brothers is a few days away, which was one of the major casualties of the credit crunch, which has driven major economies into recession and the Eurozone to the brink of collapse. The week begins with a raft of countries releasing their manufacturing data. It began with China, as a major consumer and producer; the slowdown has been a significant concern t…

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“An Englishman’s home is their castle” The obsession with home-ownership, is a mere' aspiration for the majority, though it is becoming unachievable in some locations without the help of the bank of mum and dad. House prices vary significantly in the UK and even by street in the capital. A roof over a person’s head is a basic need, but homeownership provides stability and can be more cost effective than rent. Today it was announced that UK mortgage ap…

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The foreign exchange markets are revered for their volatility, the multitude of factors that drive prices bring opportunities (and potential losses) for traders. Though there are many contributing reasons to price action, FX is like the majority of financial assets, the price is derived from the supply and demand. Each currency is traded as a value of another, with the most liquid cross being against the greenback (USD). The movement and exchange of currencies facilitates international…

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The question on every trader’s lips is whether the FOMC minutes released at 7pm (BST) will state if the members of the committee discussed scaling back the bond-buying program. Currently the Federal Reserve is purchasing $85 billion of bonds, along with holding interest rates low. Traders have attempted to second-guess Fed Chairman Ben Bernanke’s tapering. Following the announcement in June by Bernanke that the Fed could begin reducing the monthly purchases later this year…

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The economic indicators for the UK economy are showing that a recovery is beginning to gain momentum and is hopefully sustainable. Since the “credit crunch” the economy has been into a recession (not the double, or triple that had been previously thought) but it was deeper than initially thought. The British economy is dominated by the service sector, and is a global leader in many areas of finance, such as foreign exchange transactions. The PMI data released on Monday comb…

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It is the first Friday of the month, and that means it is the release of the pivotal US employment figures, non-farm payrolls at 13:30pm (London). The figure enacts fear and excitement for investors due to the volatility the release can generate. What are the bank’s estimates? Morgan Stanley: +200K Santander Asset Management: +220K Commerzbank AG: +185K Credit Agricole CIB: +200K Goldman, Sachs & Co: +200K Moody’s Analytics: +185K…

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China has been propelled to the position as a major global economic power in the last few decades. It has experienced sustained periods of unrivalled economic growth. Double digit GDP figures are something that the western world could only dream of, with the smallest positive print being hailed as a success. What has fuelled the Chinese economic growth? China has witnessed a consistent boom period, that has thrust the country to the status as the world’s second biggest econ…

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On Wednesday the FOMC released the minutes for their meeting held June 18th and 19th. Fed Chairman Ben Bernanke had signalled to the markets that he intended on tapering the quantitative easing later this year. The minutes stated that certain members of the FOMC proposed that a reduction in asset purchases could be warranted sooner than Bernanke’s “end of the year” stance. Following the release of the minutes, the Fed Chairman gave a speech in Boston attempted to ref…

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