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The BoE cut interest rates to a record low of 0.25% today as well as pumping £170bn of new money into the economy as a further stimulus package to prevent the UK falling into recession following the Brexit vote in June. The Bank’s Monetary Policy Committee unanimously voted 9-0 to reduce rates by 0.25% cutting borrowing rates for the first time in 7 years. Forecasts for the growth of the UK economy were cut by the biggest single amount since regular forecast have been…

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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…

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The FTSE 100 is edging closer to its all-time record high reached on the final day of trading in 1999 at the height of the tech bubble. The components of the index are heavily weighted by financial and commodity companies that have had significant declines over the last 15 years. The index is isn’t a proxy for the growth of the UK economy due to the high percentage of global exposure from earnings for the components. FTSE 100 currently trading 6910, the record intra-day high is 6…

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The release on Wednesday morning from the Office for National Statistics (ONS) showed that the number of people in employment has continued to increase. The 3-month unemployment rate for November 2013-January 2014 was 7.2%, just above the Bank of England Forward Guidance 7% threshold announced in August 2013. The full ONS Labour Market Statistics release for March 2014…

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The Bank of England Monetary Policy Committee minutes from the meeting held on the 5th and 6th of March show that the members voted unanimously to leave interest rates and asset purchases unchanged. Current base rate: 0.50% Asset purchases (QE): £375bn The report highlights the appreciation of Sterling due to safehaven flows due to the escalation of tensions in Ukraine/Russia. The MPC mentioned that Sterling could continue to strengthen if UK growth remains favourabl…

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A top US central banker on Monday warned the “feral hogs” of financial markets against overreacting to the Federal Reserve’s plans to slow its bond buying, as yields on US Treasuries climbed to their highest level since August 2011 - FT Deutsche Bank cuts commodity forecasts: Gold by 7% for 2013 and cuts 2014 price by 11% Ex-Italian PM Silvio Berlusconi was sentenced to 7 years in jail and banned from holding office on Monday after being found guilty of having s…

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Ben Bernanke took centre stage yesterday, as he read a prepared text stating that that he sees no benefit in tapering of QE, pushing Gold up around $30 to over $1400/oz, with the expectation of prolonged money printing. After the prepared text, Ben Bernake held a Q&A session, which he subsequently stated that if employment and US data continued to improve then over the “next few meetings” the Fed could begin to taper. These comments led to a whipsaw in markets, as traders rev…

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The Bank of England releases their minutes from the previous MPC meeting at 9:30am, the immediate headline will be how the members voted on the interest rate and asset purchases. Investors will then look for a change in stance or hints regarding the future policy; interest rates have been held at a historic low since 2009. The current does of ultra-loose monetary policy will need to be withdrawn at some point in the not too distance future, though analysts believe that the next Governor Mark…

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There is a growing concern that the UK government’s flagship scheme to help first time buyers access the housing market will fuel a property bubble. On Monday according to data released by Rightmove, theaverage house price in London is now above £500,000 for the first time. Low borrowing rates, demand outstripping supply and buy-to-let rental yields have all fuelled the surge. Analysts are highlighting that the Chancellors scheme to help many individuals access the property marke…

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On Tuesday as the FTSE 100 closed at a 5 and half year high, as the potential takeover of utility company Severn Trent. Equity indices in Europe and the US have powered higher, fuelled by investors search for a return. The prolonged period of record low yields on government paper, and the cost of debt financing has led to an increase in M&A activity. The dollar has been strong across the board, reaching multi-week and month highs against all of the majors. The depreciation in the Y…

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Global equities markets soared yesterday with some bourses printing all-time highs. To those outside of the investment community the equity rally seems in contrast to economic news. -FTSE 100 closed at 6,557.30 the highest level since December 2007 -DAX closed at 8,181.87 an all-time high -Dow Jones Industrial Average rallied to close above the psychological 15,000 level for the first time The rally has been fuelled by cheap money, from the historically low borrowing…

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IndexTrader Magazine, includes some comments that Joe Bond (VP of Trading) made regarding the recent move in Sterling. A link to the full PDF edition can be found here: http://www.index-trader.co.uk/wp-content/uploads/backissues/IndexTraderMarch2013.pdf This link is hosted on an external website (Index-Trader Magazine) and Abshire-Smith cannot be held responsible for its contents.…

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NIESR released their forecast for UK growth yesterday afternoon, for the 3 months to February of -0.1%, signalling the likelihood of a triple-dip recession. Worryingly their report details that they expect “output to pass its peak in early 2008 until 2015.” FTSE 100 closed at a new 5-year high as investors shrugged of concerns following poor UK macro data Sterling strengthened throughout the US and Asian sessions, after trading at 2 and half year lows in recent days…

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Dow Jones closed at an all-time record high of 14,254 FTSE 100 touches a post Lehman Brother’s intra-day high 6,342 British manufacturers must not be “blindsided” by the importance of trading with Europe because the “big future for exports” is with emerging markets, according to Jim O’Neill, chairman of Goldman Sachs Asset Management - Daily Telegraph Capital flight from Cyprus has accelerated since eurozone politicians began threatening…

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European Central Bank President Mario Draghi signaled the bank has no intention of tightening monetary policy anytime soon with inflation projected to “significantly” undershoot its 2 percent target next year - Bloomberg Royal Bank of Scotland (RBS) has reported its fifth annual loss since it was rescued by the government in 2008. Pre-tax loss of £5.16bn includes past conduct charges of £1.1bn for PPI settlements, £700m for interest rate swaps and a £…

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