Quantitative Easing

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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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On Thursday ECB President Draghi announced his “Big Bazooka” the ECB quantitative easing programme (QE). The central bank announced a slightly larger bond-buying programme of €60 billion per month into 2016. This is a significant amount of “money printing” which is an attempt to stimulate growth within the Eurozone. The announcement had been widely priced in following tactical leaks to the press prior to the event. EURUSD Since March 2014 the Euro aga…

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The European Central Bank (ECB) is expected to announce quantitative easing (QE) at their policy meeting in Frankfurt. The market expectation is for an injection into the economy of €1 trillion into the Eurozone, therefore this belief is priced into the current market prices. The Euro has weakened, and Gold has been bid in recent days, however yesterday on the source (WSJ )that the ECB would buy roughly €50 billion of bonds per month, the Euro rallied and Gold softened. Traders att…

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Spot Gold is currently trading around the $1,205 level today, near its three-week low as the dollar strengthened across the board following the Federal Reserve’s decision to end its asset-purchase program known as ‘Quantative Easing’ last night. Fed officials, who voted on whether to proceed with plans to end the monthly bond-buying or not, dismissed recent turmoil in global financial markets and weak inflation figures, instead focusing on employment gains as they sig…

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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…

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At 2pm ET (6pm London) the US Federal Reserve will release the interest decision and the FOMC releases its statement on monetary policy for October, following the conclusion of their two day meeting. In September the majority of market analysts had expected the Fed to begin to taper the current pace of bond purchases and beginning policy tightening. However the level of bond purchases was left unchanged, giving a bid to precious metals and a boost to equities in the US and Asia. It was…

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The foreign exchange markets are revered for their volatility, the multitude of factors that drive prices bring opportunities (and potential losses) for traders. Though there are many contributing reasons to price action, FX is like the majority of financial assets, the price is derived from the supply and demand. Each currency is traded as a value of another, with the most liquid cross being against the greenback (USD). The movement and exchange of currencies facilitates international…

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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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On Wednesday the FOMC released the minutes for their meeting held June 18th and 19th. Fed Chairman Ben Bernanke had signalled to the markets that he intended on tapering the quantitative easing later this year. The minutes stated that certain members of the FOMC proposed that a reduction in asset purchases could be warranted sooner than Bernanke’s “end of the year” stance. Following the release of the minutes, the Fed Chairman gave a speech in Boston attempted to ref…

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US traders come back to their desks today following the public holiday for Independence Day, and are greeted by the pivotal US jobs release. What are US Non-Farm Payrolls? The US Department of Labor releases a monthly employment report for goods, construction and manufacturing. It is usually release on the first Friday of the month; though this can differ (it is officially the third Friday after the end of the reference week). Median estimate Each month analysts attem…

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The FOMC met on Tuesday and Wednesday with the head of the Federal Reserve Ben Bernanke announcing as expected to leave rates unchanged at 0.25% and current policy unchanged. Trading throughout the European session on Wednesday had been subdued as traders awaited Bernanke’s speech and Q&A session to see when tapering of the current quantitative easing programme would occur. Speculation, as to when “tapering” would occur, has been the topic for analysts and market commen…

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The Bank of England is to make its monthly interest rate announcement alongside any further changes to the asset purchase facility at 12pm. The consensus is that the central bank will refrain from making any changes from the current course of quantitative easing (£375bn) and interest rates on hold at a record low 0.50%. There are expectations that the MPC will wait until Mark Carey becomes governor before increase the current level of asset purchases. Recent macro data from the UK has…

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The Bank of England held its benchmark interest rate at the 4 year low of 0.5% as expected. Prior to the announcement out of the 70 economists surveyed all expected for the rate to be left unchanged. The cenral banks asset purchase facility (QE) was also left unchanged at the current total of £375bn. No statement accompanied the release.…

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Uncertainty is something that investors will attempt to avoid at all costs. Political instability, verging on a nuclear war could cause a major shift of assets into safe havens. If the current words escalate, there is a real threat of something far more worrying to occur. North Korea has increased tensions, by threatening the US with a nuclear strike. The US realises that this the state poses potential danger and has deployed a missile launcher in Guam - Guardian More than half of all…

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