Analysis

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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Janet Yellen the newly appointed Federal Reserve Chairwoman will make her first public appearance today. The greenback is trading near a two-week high, as investors believe that Yellen will have a dovish outlook, and will leave the level of stimulus unchanged. Ben Bernanke the previous Fed Chairman had begun the tapering process, as the US economy is weaned off of the ultra-loose monetary policy. Fridays employment data, was a disappointment which some analysts believe will be one of t…

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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 Japanese Yen has strengthened in the FX market against the greenback during the last 48 hours, reaching a low 102.515. On Thursday data released from the US jobless figures showed that economy is still finding its feet. The Yen has strengthened trading through to a 102 handle, with expected support from previous lows at 102.49 on the 17th December and 102.46 on the 12th December.…

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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 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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In response to the growing demand for methods of online funding, Abshire Smith, the FCA broker located in London, England and CASHU has announced today a new partnership. This will allow clients (Middle Eastern in specific) to fund their Abshire-Smith trading accounts using CASHU Prepaid Cards or electronically. Abshire-Smith has a global client base and is continuously expanding funding options to facilitate and simplify the process for clients. Established in 2002 by Maktoob (now Yah…

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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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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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