Cable

It’s the first Friday of the month, which means that it at 13:30 (London) the pivotal US employment report will be released. The Non-Farm Payrolls report is compiled by the United States Department of Labor for jobs in manufacturing, goods, services and construction, but doesn’t include non-profit, private household or farm works (due to the seasonal swings). The unusually disruptive weather has caused havoc across North America, which has been the go-to reason for analysts…

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As the 5 year anniversary of the Bank of England cutting interest rates to 0.5%, the bank has announced to leave the base rate and asset purchases unchanged. The current level of asset purchases (QE) remains at £375bn. The 5 year anniversary is a significant length of time for interest rates to be held at the record low of 0.50%. The ultra-loose monetary policy has been highlighted as a risk to the economy by some analysts. Mark Carney’s policy of Forward Guidance headline…

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The Bank of England Minutes released on Wednesday, showed that the MPC voted unanimously to keep interest rates at the record low rate of 0.50% and asset purchases unchanged. The BoE base rate has now been at 0.50% since March 2009. In the minutes it said that despite the sharp fall in unemployment, the committee believed that the economy is able to “absorb spare capacity further before raising rates”. The change in focus from the 7% unemployment threshold to reducing the o…

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The inflation rate for the UK fell to below the Bank of England’s target of 2% for the first time since November 2009. Inflation has overshot the 2% target since then, which had been a concern for analysts, who believed the central bank would need to raise interest rates to combat the rise. Mark Carney has now released “Forward Guidance 2.0,” which is focused on the output gap, which last year the BoE said was “unobservable” and “difficult to explain&rdquo…

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The Bank of England governor Mark Carney released the Quarterly Inflation report on Wednesday morning followed by a Q&A session. Key Headlines *Stimulus will need to be exceptional for some time *BOE SEES UNEMPLOYMENT FALLING TO 7% IN QTR THROUGH JANUARY *BOE SEES SCOPE TO KEEP 0.5% RATE AFTER JOBLESS THRESHOLD HIT *BOE SEES CPI 1.7% IN 2Q 2015 BASED ON MKT RATE EXPECTATIONS The full Bank of England Quarterly Inflation Report In the FX market…

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The Federal Open Market Committee concluded their two day meeting on Wednesday and voted unanimously to taper the level of monthly asset purchases by $10bn from the 1st February. At Ben Bernanke’s final meeting, the reduction of asset purchases was split equally between Treasury’s and mortgage-backed securities (MBS). The pace is now expected to continue with a monthly reduction of $10bn as the Fed attempts to wean the US economy from the ultra loose fiscal policy. Some ana…

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The fourth quarter growth figures released by the Office for National Statistics showed that the economy grew by 0.7%, in line with expectations, but slightly below the Bank of England’s projections. Following the release sterling initially weakened against the greenback by around 50 pips, and the subsequently recovered to back above 1.66: Full ONS release. Figures released earlier this morning from the Confederation of British Industry (CBI) reported that the…

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The UK Unemployment rate for December compiled by the International Labour Organisation (ILO) declined to 7.1%, lower than the median estimate of economists of 7.3% and Novembers 7.4%. This is the biggest fall since 1997, the number of out of work dropped by 137,000. The data released by the Office for National Statistics showed that the unemployment rate had dropped to near the Bank of England’s forward guidance threshold of 7%. The BoE had previously highlighted the unemployment rate…

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The Office for National Statistics released the UK December retail sales figures on Friday morning, which were well above analysts’ expectations. These were the strongest UK retail numbers since records began, with GBP bid against all of the majors. UK Retail Sales Data (Dec): Ex Auto (M/M) +2.8% v. +0.3% exp. (prev. +0.2%) Ex Auto (Y/Y) +6.1% v. +3.2% exp. (prev. +2.1%) — Sigma Squawk (@SigmaSquawk) January 17, 2014 This adds pressure on retailers who…

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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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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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The UK unemployment rate has been brought into investors focuses following Governor of the Bank of England Mark Carney’s Forward Guidance. He stated that the interest rates would be held at the record low of 0.50%, until the unemployment rate drops to 7% from the current 7.8%. The Bank of England’s forecasts that the unemployment rate will fall to 7% in 2016, though the markets are pricing an increase in interest rates in 2014. There are various caveats to the Forward Guida…

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Technical Outlook Sterling has been bid in FX space in an upward channel for the last 2 weeks, within a bigger upward trend since the end of June. 1.5717 being the recent high was broken during the Asian session with the pair reaching 1.5732, the next level of resistance is likely to be 1.5751, which was the previous daily high on the 17th June. The RSI is relatively high (76.2) which could mean the pair is overbought in the short term, seeing some profit taking. Macr…

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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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