Analysis

Bank of England Governor Mark Carney dampened expectations on the timing of the first UK rate hike innearly a decade yesterday, predominantly citing the recent slowdown in China and other emerging market economies as the main reason. "The outlook for global growth has weakened since the August inflation report," the BOE's Monetary Policy Committee said in a statement. The BOE highlighted that it is, by no means, in any rush to raise its benchmark interest rate and v…

Continue Reading →

As predicted, the Federal Reserve kept short-term interest rates unchanged at near zero yesterday but signalled that a rate hike before the turn of the year remains a possibility. As was the case in September, the central bank’s accompanying statement did not explicitly mention concerns over the Chinese economy as a reason not to raise rates for the first time in a decade. Last month they cited turbulent financial markets and uncertain economic developments overseas as reasons fo…

Continue Reading →

Chinese shares were up overnight as GDP and retail figures beat expectations, helping to hide the fact that economic growth levels fell below 7% for the first time since 2009. China’s economy expanded quicker than economists forecast in the 3rd quarter as the services sector propped up the world’s second-largest economy. This suggests that monetary and fiscal stimulus is keeping Premier Li Keqiang’s 2015 expansion target within reach ahead of his historic UK visit tod…

Continue Reading →

While there is little doubt the BoE vote will result in an unchanged verdict on rates this afternoon, economists will be looking for signs in the minutes as to when the gradual policy tightening might begin. There are a few experts predicting another BoE rate setter is set to join Ian McCafferty to vote for a 25 basis-point hike this time around, however most will be looking for stronger indicators regarding the UK economy in the coming months before doing so. Inflation remains t…

Continue Reading →

Oil prices have flattened over the last couple of days, halting a huge sell-off from Monday; investors are still cautious as fears remain over China's economic slowdown and hefty global supplies. The sell-off on Monday came after news that Chinese industrial profits slumped in August, with the biggest drops concentrated in producers of coal, oil and metals. Commodity and equity traders will get more evidence about China's economic performance tomorrow when final manufactu…

Continue Reading →

The Federal left short-term interest rates unchanged ending weeks of debate whether it was the right time to end an era of near-zero rates in acknowledgment of the ever improving US economy and job market. A majority of Fed officials still believe the central bank will raise rates before the end of 2015, but the central bank showed a little less conviction with the number of officials in favour slipping to 13 from 15 back in June. Janet Yellen noted in a press conference after th…

Continue Reading →

Speculation and anticipation is growing and not just among economists, as Fed Chairman Janet Yellen is running out of excuses not to raise interest rates at next week’s Federal Reserve policy meeting. It seems that just about every indicator is saying a move would cause government bonds and the equity market little disruption but the debate remains whether the US economy has recovered sufficiently to allow the tightening of monetary policy to begin. Investors and the public…

Continue Reading →

The US Dow Jones Index dropped over 1000 points on the open today amid extreme volatility in the markets as the Shanghai Composite Index finished it's trading session down 8.5% at 3209.91. The slowdown in the Chinese economy is having huge repurcussions not only in equities which have seen a massive correction across the board in commodities too. Both Europe and the US are feeling the heat; FTSE100 is currently down 4.5%; CAC down 7% & Dax off 6%. US Crude Oil has extende…

Continue Reading →

The PBoC’s overnight move to weaken its national currency, the RMB (Chinese Yuan), shows a significant shift in policy. They confirm they are to play a greater role going forward in the management of the exchange rate, sending ripples through the foreign exchange market. The move certainly comes at an opportune time for them following a series of weak macro trade data out of the country recently; exports have tumbled 8.3% in July from a year earlier and there has been a severe sl…

Continue Reading →

The Federal Reserve kept interest rates at near zero once more last night but continued to fuel the ever intensifying fire of speculation concerning when the first rate hike in nine years will be. Chairman Janet Yellen primed the markets in her Statement with positive US economy sentiments, primarily citing progress in the US job market as the main instigator. The US unemployment rate has decreased from 10% in 2009 to 5.3% in July of this year. Yellen’s wording of ‘hiring g…

Continue Reading →

After sliding on Friday Gold took massive dive overnight, plunging as much as 5.5% in morning trading, hitting a low of around 1072. This dragged a majority of commodities the same way as the dollar strengthened across the board as investors focus on the timings of a US rate rise. It was the first time Gold traded below $1,100 since early 2010 and its lowest mark since November 2009. Other precious metals subsequently followed suit; platinum down 3.8%, silver 1.8% and palladium trading…

Continue Reading →

After a marathon 17 hour session of negotiations, Greece has finally reached a deal with its creditors; here’s what we know so far: *The deal will unlock €82-86bn of funds for Greece - that's enough to keep it going for another three years *There will be no Grexit - European Commission president Jean-Claude Juncker made that much clear *Greece will have to transfer €50bn of assets to a new fund, although it'll be based in Athens, rather than Luxembou…

Continue Reading →

The man who shocked us all last week calling the surprise Greek Referendum, the then Greek Finance Minister Yanis Varoufakis' promptly resigned this morning despite the vote coming in as a resounding ‘No’ to accepting their creditors’ reform proposals. He actually initially announced that he would only resign should the Greek public vote ‘Yes’ thus the result and his departure leave analysts and everyone else alike even more ‘in the dark’ a…

Continue Reading →

The latest figures from the British Banking Association show that mortgage approvals reached a 24 month high in May. In the run up to the General Election April, the risk of an unknown coalition and a mansion tax slowed housing demand. Post-election, with a Conservative majority and interest rates still at 0.50%, buyers are back in force. May mortgage approvals edged up to 42,530 from 42,020 in April, the highest outturn since March 2014. The latest data supports the view of a reaccele…

Continue Reading →
Permalink

The Bank of England minutes for the MPC meeting ending on the 3June recorded that the committee voted unanimously (9 – 0) to leave interest rates unchanged at 0.50% and asset purchases (QE) at £375bn. Lower inflation is likely to dissipate, which is in line with previous comments from Mark Carney comments that the slowdown in inflation was transitory due to the sudden fall in energy prices. Any change from the MPC member voting from 9-0 would be seen as a signal that monetary pol…

Continue Reading →