Fri, Jan 22, 2021 @ 23:16 GMT
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Canadian Dollar in Spotlight, With Eyes on BoC and Oil Price

Canadian Dollar is a main focus today with BoC rate decision featured. Recent strong risk-on markets haven't given the Loonie much lift. It's upside is somewhat capped as oil price turned into consolidation after last week's spike. Also, traders turned cautious before BoC's indication on the chance of a...

BoE Haldane: Recovery probably at rate of knots from Q2

BoE Chief Economist Andy Haldane said current tougher lockdown restrictions are threatening to bring the UK economy into a double-dip recession. That next slump could be "shorter, sharper shock" than the last one in 2007. Though, unemployment could be capped as long as Chancellor of the Exchequer Rishi Sunak maintains...

Weekly Economic and Financial Commentary: Consumers Pull Back as COVID Continues to Surge

U.S. Review Consumers Pull Back as COVID Continues to Surge Retail sales fell 0.7% in December, the third straight monthly decline. Sales are still up 2.9% over the year, however. The CPI advanced 0.4% in December (1.4% over the year). Inflation remains tepid, with core prices up 0.1% in the...

Weekly Focus – Biden Inauguration Next Week amid Fed Repricing

President-Elect Joe Biden is due to be inaugurated on Wednesday. While the event is normally a pure formality, tensions are high in the US, with concerns about another riot. We expect the Biden administration to be more stimuli-friendly near-term, as Biden told us when he presented his economic plan...

Interest Rates Again Have Become A Potential Driver For The US Currency

Markets The global reflation trade met some resistance since last week. There was no outright correction but some parts of the global pattern show signs of fatigue. The equity rally slowed, the USD decline took a breather ... The rise in US yields yesterday also met resistance. Initially, the uptrend...

BOE’s Baily Downplays Negative Rates Amid Coronavirus: GBP/USD, EUR/GBP

There is no doubt that the UK is going through a tough time with the coronavirus pandemic. Not only is the country dealing with lockdowns that will last until at least mid-February, but there are strong worries over how this will play out in the economy as well. The...

Sterling Rises on BoE Comments, Dollar Lost Momentum

Sterling surges broadly today after BoE Governor criticized that negative interest rates have a lot of issues. Commodity currencies are currently the next strongest, reversing some of this week's pull back. On the other hand, Dollar is now the weakest one for the day, as the near term recovery...

Stocks Steady, NFIB Plunges, GBP Strengthens, Oil and Gold Rebound, Bitcoin Back above $35k

US stocks are steadying following yesterday's decline as investors remain optimistic that Biden will unveil a multi-trillion fiscal stimulus plan on Thursday, the Fed is still far away from tightening, and that vaccine rollouts have the world nearing the other side of COVID. Yesterday, Fed's Bostic noted that a...

BoE Bailey: There are a lot of issues with negative interest rates

BoE Governor Andrew Bailey said today that negative rates are a "controversial issue" and there are "a lot of issues" with it. He added that negative rates would complicate banks' efforts to earn a rate of return, and potentially hurt their lending. Bailey added that "we're in a world of...

Fed Officials Talk Tapering

Dollar buoyed by rising US yields as Fed discusses QE tapering Stock markets suffer a rare pullback, dragged down by big tech Sterling gets its feet under it as BoE Governor plays down negative rates Parade of Fed speakers today – normalization remarks crucial US growth expectations reflected in...

Dollar Firm on Upbeat Fedspeaks, at a Near Term Juncture

Dollar remains firm after some Fed officials' upbeat talks about the second half but buying appears to be slowing slightly in Asian session. Gold is also setting in range for now, reflecting some hesitation to push the greenback further higher. Yen and commodity currencies turned mixed, together with the...

BoE Tenreyro: Feasibility study of negative rates still in progress

BoE MPC member Silvana Tenreyro said in a speech that the work on feasibility of negative rates is "still in progress". Once the bank is satisfied that negative rates are feasible, the MPC would have a "separate decision over whether they are the optimal tool to use to meet...

Dollar And Equities Roar As Biden Promises Fresh Stimulus

President-elect Biden pledges new relief package worth ‘trillions’ Stocks hit new records, dollar comes back to life, gold purged Is the market now trading the ‘growth narrative’ instead of ‘reflation’? Reflation or growth trade? It matters for USD Hopes that the Biden administration will unleash a federal spending spree came...

Pound Dips on Bailey’s Comments

The British pound has posted losses on Wednesday, erasing the gains seen in the Tuesday session. Currently, GBP/USD is trading at 1.3578, down 0.36%.   It was an excellent end to 2020 for the pound, which gained 2.5% against the sad-sack dollar in the month of December. The pound has been...

Last-Minute Brexit Deal Reached. GBP Upside Limited with Good News Already Priced in

A last-minute Brexit trade deal has been reached just before the Christmas. the outcome is largely inline with our expectations. As a no-deal Brexit is avoided, BOE should be able to keep its powder dry for the year to come. The chance of negative interest rate has also been...

Euro and Swiss Franc Slightly Firmer in Subdued Trading

It seems that traders are already on holiday with the subdued market activity today. Sterling softens again on reports that EU rejected UK's latest proposal on fishing rights. Australia and Zealand Dollars also dip mildly. On the other hand, Swiss France firms up together with Euro, followed by Dollar...

BoE Haldane: The risks are still with us and the risks are still real

BoE Chief Economist Andy Haldane said in a Guardian interview, the central bank would continue to provide monetary policy support to the economy, as "the risks are still with us and the risks are still real." The right time "to signal and to execute" the reduction of insurance provided...

Jobless Claims Continue to Rise, Oil and Gold Rally on Weaker Dollar, Bitcoin Party Continues

US stocks are rallying on COVID relief bill optimism and hopes that a post-Brexit trade deal will be reached by Sunday. Wall Street is completely focused on stimulus talks and ignored deteriorating US economic data, except for the robust housing market. US data US weekly jobless claims continue to head in...

Dollar’s Selloff Intensifies after Poor Initial Jobless Claims

Dollar's selloff intensifies further today, after worse than expected job data. Also, markets are generally on risk-on mode, as traders are optimistic that stimulus deal could be reached in the Congress soon. Swiss France is currently the next weakest, having little reactions to SNB rate decision. Australian and New...

BOE Stays Put as Deadline of Brexit Talk Approaches

BOE left the Bank rate unchanged at 0.1% and the asset purchase program at 875B pound. The central bank remained cautious about the “unusually uncertain” economic outlook and pledged to take “whatever additional action is necessary” if the outlook for inflation weakens. Despite forecasts that GDP growth in December...

BoE stands pat, Q4 a little weaker than expected due to coronavirus

BoE judged that "the existing stance of monetary policy remains appropriate". Bank Rate was held unchanged at 0.10%. Total target stock of asset purchase were also kept at GBP 895B. Both decisions were unanimous. It also pledged to "stands ready to take whatever additional action" if inflation outlook weakens. Also,...

(BOE) Bank Rate Maintained at 0.1%

The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 16 December 2020, the Committee judged that the existing stance of monetary policy remains appropriate. The...

BOE Preview – Staying Cautious about Brexit Outlook

For QE expansion at the last meeting, we expect the BOE will keep its powder dry this month. BOE should leave the Bank rate unchanged at 0.1%, and the size of asset purchases (QE) at 875 pound. There have been mixed developments since the November meeting. Economic data released...

Currency Pair of the Week: GBP/USD

The last few months have been hectic for this pair due to Brexit, and we have dutifully been writing about potential price action in both GBP and EUR pairs.  If that’s not enough, this week brings potential for more volatility as both the Bank of England (BOE) and the...

Sterling Softens as Brexit Talks Drag On, Yen and Swiss Mildly Higher

The forex markets are quiet in a typical Asian session on Monday. Yen and Swiss Franc are trading slightly higher as Asian stocks pull back from recent rally. While exports number from China look strong, imports growth clearly lagged behind. Sterling is currently the weaker one as Brexit negotiations...

BoE Haldane: Plenty of scope for vaccine to release more of pent-up demand

BoE Chief Economist Andy Haldane told the Daily Mail newspaper that as people's incomes held up and spending was restrained by the coronavirus restrictions, "they have amassed around £100billion of excess savings." People are using their "involuntarily-accumulated savings" on a new house or a new car, and there are...

Week Ahead: Brexit, Vaccines, and Stimulus

“How much longer?” asks the child from the back seat of his car.  This is how many people feel as we wait for a Brexit deal to “get there”.  No one knows for sure, and headlines on Friday confirm that.  From comments that “trade talks to resume later today”...

Canadian Dollar Boosted Further by Job Data, Greenback Shrugs NFP

Canadian Dollar is given another boost in early US session after stronger than expected job data. In the background, the Loonie has already risen following higher oil prices. Dollar, on the other hand, has little reaction to much worse than expected non-farm payroll report. For the week, Dollar and...

BoE Saunders: Effective lower bound interest rate a little below zero

Michael Saunders talked about "Some Monetary Policy Options – If More Support Is Needed" in a speech. He said, "My judgment at present is that the ELB (effective lower bound) for the UK is probably a little below zero, provided appropriate mitigations (eg reserve tiering, bank funding scheme) are...

BoE Tenreyo: Boosts from vaccines only come when they’re rolled out widely

BoE MPC member Silvana Tenreyo welcome the news regarding coronavirus vaccine development. however, the economic boosts would not come until vaccines are actually rolled out widely. Households could still delay spending until the vaccines due to health risks. Also she noted that the progress on job markets remain one of...