The final trading day of the year is upon us and the end of 2013 is in sight. Trading volumes are expected to be relatively low until after the Christmas/New Year lull. The year in the financial markets, will most likely be remembered for the positive of exiting financial crisis mired by scandals of fixings in a variety of markets. What to expect in 2014? The UK and US economies are predicted to grow, unemployment to trend lower and the timing of tightening economic policy…

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…

On Wednesday evening (London) the FOMC completed their two day meeting and announced the Fed would start tapering the amount of assets purchased each month. Analysts and market commentators were mixed as to their views, with the minority expecting Bernanke to act in December with the majority believing the Fed would wait until January or even March. The release came at 7pm London that the Federal Reserve is reducing the current level of asset purchases to $75bn from the previous monthl…

The FOMC concludes their two day meeting today and will announce if they will reduce their monthly asset purchases from $85billion ($40bn MBS and $45bn Treasury’s). It is the final meeting for Ben Bernanke the current Chairman of the Fed, with his successor expected to be hawk Janet Yellen. At 7pm GMT the interest rate, economic projections and most importantly the level of asset purchases will be announced. In the Bloomberg survey of economists, 35% expect the Federal Reserve to…

Bank of England Governor Mark Carney has warned the “great risk” of unwinding the current quantitative easing programme. The stimulus was headed by his predecessor Mervyn King, a mixture of ultra-low interest rates and QE. Carney was speaking to the House of Lords, mentioning the risk of the Federal Reserves tapering of their QE, and how the BoE might execute its unwind. This is a difficult task, as the UK economy is staging a recovery, though there is concern increasing in…

The US Federal Reserve currently purchases $85 a month of assets, combined with low interest rates to help stimulate economic growth. The markets speculation as to when the Fed will begin to Taper, this programme of quantitative easing has some believing it could be on Wednesday at 2pm. The main focus for traders this week, before the holiday lull, will be does Bernanke start tightening at his final meeting as Chair of the Fed, before Janet Yellen takes over. The markets are awash with…

The timing of the Fed’s Taper has been a recurring theme, that has been a key driver of price action. In January the current Federal Reserve Chairman Ben Bernanke, and will most likely be succeeded by Janet Yellen. Analysts and traders have been attempting to predict the Federal Reserve’s taper timing, however the messages from the committee has been difficult to disseminate. Each of the Fed members (voting and non-voting) speeches and interviews have been picked through for any…

As expected, the Bank of England has left interest rates unchanged at 0.5% and asset purchases at £375bn. The full release from the BoE can be found here. @BankofEngland maintains #BankRate at 0.5% and the size of the Asset Purchase Programme at £375 billion — Bank of England (@bankofengland) December 5, 2013 The release at 12pm today, came during the Chancellor George Osborne’s Autumn Statement with the opposition still responding.…

The media coverage of the housing market in the UK has been prominent since the economic crisis began in 2007. The global melt down began with mortgages being given to sub-prime borrowers, and then repackaged and sold as investment grade debt by banks and brokers. The property market in the UK ground to following the collapse of Lehman’s as banks tightened up their lending requirements and some home-owners were left in negative equity. Fast forward 5 years and there is a resurgen…

The Federal Open Mark Committee (FOMC) left the potential for tapering to begin in December, stating “warrant trimming the pace of purchases in coming months.” The FOMC is walking a tight rope, as it attempts to soften the market impact of reducing its current level of quantitative easing. The Fed is attempting to signal to the market a vague timetable of tightening, without shocking investors. It is a difficult task, if they are too vague, then markets are left unsure, if the ex…

The Bank of England Monetary Policy Committee voted unanimously to hold interest rates unchanged at the record-low rate of 0.5%, and the level of asset purchases at £375bn. Under the Banks forward guidance policy the focus had been on the unemployment level falling to the threshold of 7%. However this target was left in question following the BoE Inflation report with Carney, saying the bank might not raise rates immediately following a drop in unemployment. MPC Vote…

The Bank of England governor Mark Carney’s comments during the latest inflation report on Tuesday. Prior to the news conference Sterling was bid on the back of the better than expected employment figures, which had traders predicting that the BoE would raise rates sooner than had been predicted. Under the banks forward guidance, 7% unemployment level had been the threshold, highlighted by Carney as the level that monetary policy would begin to be tightened. This was thrown in to…

On Tuesday, I was fortunate enough to attend the Forex Magnates Summit in London. The annual conference plays host to participants from all areas of the FX market including brokers, payment providers, technology vendors, prime brokers, prime of prime providers and liquidity aggregators. The conference is a two-day exhibition and conference, with different discussion panels. The industry specialists from high profile members of the FX community discussed current topics and issues.…

UK ILO Unemployment beat expectations, coming in at 7.6% vs expectations of 7.7%. The number of unemployed people in the UK fell 48,000 to 4.27million. The Bank of England’s forward guidance; focused upon a headline unemployment rate of 7%. Today’s figure is a positive step towards this level, which potentially will see an increase in interest rates in the not too distant future. However one potential concern highlighted by analysts is the relatively stable hourly earnings…