Sterling

Bank of England released their quarterly inflation report this morning, with the prepared headlines of increased expectations of growth and employment figures putting a bid into Sterling. However the move was short lived, as details of a rate hike projection before year end almost diminished. GBP weakened on the back of comments made in the press conference, as Carney attempted to talk the pound down. With unemployment dropping rapidly, the focus for the BoE has now moved to wage growt…

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Data released by Markit/CIPS, showed better than expected UK service sector Purchasing Managers Index (PMI). In July Services PMI the figure was better than expected at 59.1, compared to Junes 57.6, with growth picking up pace. Service sector employment growth continued, which should contribute towards better UK ILO Unemployment figures. GBP In the FX markets sterling rallied on the back of the strong figure, with GBPUSD trading to session highs just shy of 1.69. The likeli…

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The Markit/CIPS Manufacturing Purchasing Managers Index (PMI), growth continued in July, though missed expectations. The survey released at 9:30am (London), was 55.4 for July, down from 57.2 in June. The number was well above the 50 level (contraction/expansion level), however sterling has been weak in FX markets against the USD in the last few days. GBPUSD In the last quarter, the majority of macro releases were beating expectations, with Sterling trading at a 5-year high on int…

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The Bank of England Monetary policy Committee (MPC) minutes for the meeting held on the 9th and 10th July, were released at 9:30am London. The MPC voted 9-0 to leave interest rates unchanged at 0.50% and asset purchases (QE) at $375 billion. The minutes noted: “Economists polled by Reuters expected the first increase in February 2015, although they put roughly a 40% probability on it happening during the remainder of 2014.” “..risk appetite on the month, l…

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The Office for National Statistics has released the monthly unemployment figures, with the headline UK ILO Unemployment figure for May was in line with expectations at 6.5%. This is the lowest unemployment rate since October to December 2008; this was just before a significant amount of redundancies began. Jobless claims fell by 36,600, which is higher than the estimated reduction of -27,000 jobs. Wage Data The disappointing part of the data was the wage growth, average earnings…

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The Office for National Statistics released the inflation data for June, with CPI increasing to 1.9%. Since the beginning of 2012, the CPI level had fallen from over 5%, down to 1.5% in May, which some analysts argued would reduce the pressure on the MPC increasing interest rates. The unexpected increase in inflation has put an immediate bid into sterling in the FX markets. Traders have bought Sterling on the basis that the potential first hike of interest rates will be sooner than the BoE&r…

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The Bank of England announced at 12:00 (London) that the Monetary Policy Committee has voted to leave interest rates unchanged at 0.50% and asset purchases at £375bn. This was the expectation of analysts leaving the announcement a near non-event, traders focus will be on the minutes for the meeting that will be released on the 23rd July and next month’s quarterly inflation report. Both will give traders an opportunity to gauge the MPC’s outlook for the all-important timing…

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UK manufacturing figures released on Tuesday by the Office for National Statistics, disappointed investors as they were well below expectations. Sterling has been riding high against the US dollar and Euro, has traders have digested the strong macro data, with the expectation the Bank of England will raise rates early than their current prediction. Today’s release unexpectedly missed forecasts which led to Sterling being offered in the FX markets, following last week’s multi-year…

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Sterling has traded to the highest level since 2008 on Tuesday against the US dollar, following better than expected macro data. UK Manufacturing PMI for June at 57.5, up from 57.0 in May, a number above 50.0 states expansion. The other highlight of the report was job creation at a 39-month high adding to the positive sentiment for the UK economy. RT @World_First: UK Manufacturing PMI (June) = 57.5 vs 56.8 expected and 57.0 previous > Q2 growth surely over 1% — Mike Bi…

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During a press conference held by the BoE yesterday, Governor Mark Carney issued details of their planned Financial Stability Report announcing the implementation of a series of prudent macro tools intended to help slow down the ever inflating recent UK house price bubble and to prevent an unsustainable build-up of consumer debt. Full details of the Report can be found here: http://www.bankofengland.co.uk/publications/Documents/fsr/2014/fsrfull1406.pdf Over the past four ye…

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The Bank of England released the minutes of the Monetary Policy Committee meeting that was held on the 4th and 5th of June 2014. The key line from the BoE minutes is that the MPC members were surprised at the limited expectation from the market, that the MPC would raise rates before the end of the year. relatively low probability of 2014 bank rate rise priced in by markets "somewhat surprising Bank of England voted 9 – 0 to leave interest rates unchanged at 0.5…

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The Office for National Statistics (ONS) released their Labour Market statistics for the UK at 9:30am on Wednesday morning. The headline 3-month unemployment rate for February - April 2014 beat expectations, being released at 6.6%, below expectations of 6.7% and the previous release of 6.8%. The UK government will be very pleased with these figures, reinforcing their plan to bring the UK economy back on track, however the opposition is likely to focus on the wage growth. Average earnings gro…

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UK Services Purchasing Managers Index (PMI) was released at 9:30 on Wednesday, slightly above expectations at 58.6, versus April’s 58.7. This is another strong print for the UK economy and reinforces the strength in the economic recovery. The services PMI accompanies strong survey reports from the manufacturing and construction sectors, pointing towards a relatively balanced recovery. A highlight of the statistical release was the service sector employment growth strengthened to…

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The UK Building Society, Nationwide released their monthly House Price Index in May, showing that prices continued to edge higher. In May prices grew by 0.7% and were up by 11.3% compared with May 2013. The average home in the UK now costs £186,512. House prices and Sterling House prices have become a contentious factor and the potential caveat for increasing base interest rates from the record low of 0.50%. The growth in property prices has fuelled concerns from analysts a…

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New official statistics have been released by the HM Treasury today detailing that some 7,313 homes have been sold so far under the 2nd part of the Help To Buy mortgage guarantee scheme covering the six months from 8th October 2013 to 31st March 2014; a further 20,548 new homes were sold through the scheme’s first instalment during the 13 months proceeding this. It cannot be argued that the scheme has indeed helped a lot of hard working people successfully get on the housing ladd…

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