Wed, May 19, 2021 @ 00:06 GMT
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The Fed Left Monetary Policy Unchanged. The Market Focused On The Meeting Of The Bank Of England

At the press conference, Federal Reserve Chairman Jerome Powell said that the current monetary policy is appropriate and there is no reason to change the volume of stimulus amid the sharp rise of Treasury yields in the last month. Against this backdrop, investors' concerns about monetary policy were dissipated,...

No Dotty Moves From The Fed

As expected, the FOMC held to its previous guidance of no imminent rate hikes or tapering while reiterating its views on supporting the economy to help rebuild employment. Although it upgraded its growth assessments for the US this year to 6.50%, it maintained that higher inflation was transitory. The...

BoE Could Strike A Dovish Tone, But Traders Won’t Buy It

After Wednesday's policy decision by the Fed and previously the ECB, I wouldn't be surprised if the Bank of England also tries to be more dovish than the markets are currently expecting today. But will the bond markets call the BoE's potential bluff in the same way? Indeed, benchmark...

USD Weakens After Fed’s Interest Rate Decision

USD tended to retreat against a number of its counterparts yesterday after the Fed's interest rate decision to remain on hold as was widely expected. The bank implied that still no interest rate hikes are in the schedule until 2023 is through, as per the renewed dot plot, albeit...

Dovish Fed Lifts Wall Street, But Can’t Keep Yields Down

Fed maintains dovish rate path despite upping growth and inflation forecasts Dow Jones and S&P 500 hit new records; Nasdaq rises too before futures slip Dollar falls but then rebounds as 10-year Treasury yields resume climb BoE decision up next, pound steady; yen see-saws on BoJ rumours Fed reiterates...

Is The BoE Worried About The Rise Of Longer-Term Yields?

Markets The Fed maintained the policy rate at 0-0.25% yesterday as well as its $120bn monthly bond buying pace. Tweaks to the policy statement were insignificant. Growth however was boosted to 6.5% this year (4.2% in December) and to 3.3% in 2022 (3.2%) before normalizing in 2023 to 2.2% (2.4%)....

BoE Meets, Nike And FedEx Announce Earnings

The Bank of England (BoE) will announce its latest policy verdict today and is expected to maintain its monetary policy broadly unchanged. The BoE officials are certainly optimistic about the economic outlook, but they may find hard to communicate their joy with investors given the latest spike in sovereign...

European Open: Aussie Jobs Surge, BOE Meeting In Focus

Yet more data from Australia's rebounding economy goes at odds with the RBA's dovish stance. And whilst on the central bank theme, the Bank of England (BOE) meet this morning. Asian Indices: Australia's ASX 200 index fell by -49.3 points (-0.73%) to close at 6,745.90 Japan's Nikkei 225 index has...

Traders Await Number Of Interest Rate Decisions Today

The US dollar eased slightly after the Fed delivered its March interest rate decision. The Fed maintained a dovish stance even as it upgraded its economic outlook. It boosted its forecast that the American economy will expand by 6.5% this year mostly because of the vaccine roll-out and recent...

Dollar Falls on Risk-On Sentiment after FOMC, Aussie Powers Up on Job Data

Dollar dropped broadly overnight as markets turned into mild risk-mode following FOMC rate decision. A better economic outlook was painted by the new economic projections. Yet, Fed is clear that it's not even considering tapering the asset purchases for now. DOW and S&P 500 rose to new record while...

Awaits BoE view on recovery, yields and inflation, GBP/CHF bullish in range

BoE is generally expected to keep bank rate unchanged at 0.10% today, and hold the QE target at GBP 875B. Both decisions should be by unanimous 9-0 votes. Governor Andrew Bailey sounded upbeat about economy economy in his comments earlier this week, even though that came with "a large...

BOE Preview – Response to Rising Yields in Focus

We expect BOE to vote 9-0 to leave the Bank rate unchanged at 0.1%. Meanwhile, the QE program will also stay at 875B pound worth of government bonds, and 20B pound of corporate debt. Despite contraction in the first quarter, policymakers should point to the post-pandemic recovery as driven...

Bank of England to Stick to ‘Cautionary Realism’ as UK Yields Surge

The Bank of England will announce its latest decision on Thursday (12:00 GMT) just hours after the Fed’s, likely keeping its monetary policy settings unchanged also. There is no press conference or new economic projections to accompany the March meeting, so no fireworks are anticipated. However, investors will be...

Europe Rises, German Sentiment Jumps

European bourses are out of the blocks on the front foot after an upbeat session on Wall Street, which saw the Dow and the S&P500 hit fresh all-time highs. Encouraging earnings from the likes of Volkswagen and Zalando are underpinning the mood as is the better-than-expected ZEW sentiment data...

Everything You Need To Know About The Bank Of England

What is the Bank of England (BoE)? The Bank of England is the United Kingdom’s central bank. The BoE is tasked with setting monetary policy and issuing currency, as well as regulating banks and being the lender of last resort – meaning it provides loans to banks and other institutions...

Currency Pair of the Week: GBP/USD

The Bank of England meets this week for its March Interest Rate Decision meeting.  At the meeting in February, the BOE left rates unchanged at a record low 0.1% and the bond-purchasing program unchanged at 875 billion Pounds. “Get ready for negative rates, but that doesn’t mean we will...

Canadian Dollar Strong in Subdued Markets, Yen Weak

Trading is generally subdued in the markets today. European indices are stuck in very tight range while US futures point to slightly higher open. Both gold and oil are bounded in consolidative trading. Bitcoin was short to new record high but quickly reversed. In the currency markets, New Zealand...

BoE Bailey: Rise in rates consistent with change in economic outlook

BoE Governor Andrew Bailey told BBC radio, "we watch rates in financial markets very closely." "We have seen some increase in rates over the last month or so as have other countries," he said. "My view is that is consistent with the change in the economic outlook." "Our current view...

Week Ahead: Packed Week with Fed, BOE, BOJ and Australian Jobs

With the central bank meetings this week, traders need to be on the lookout for hints as to when a change in monetary policy may be coming. After the BOC and the ECB meetings last week, this week brings a triple whammy of the Fed, BOE, and BOJ.  Last week,...

Week Ahead – Will Fed & Co Follow in ECB’s Footsteps and Signal QE Shift?

The Federal Reserve will be meeting for the first time since yields exploded higher and the Biden stimulus bill became law. The Bank of England and Bank of Japan will announce their decisions too. Will the Fed and other central banks take their cues from the European Central Bank...

Weekly Focus – No Major Policy Changes from Fed, BoE, BoJ

European Covid-19 situation remains mixed; US and UK infection figures have declined modestly. Denmark and Norway temporarily suspended the AstraZeneca vaccine from use due to cases of blood clot among recently vaccinated individuals. While EMA has reported that nothing yet suggests that the vaccine causes blood clots, the risk...

Dollar Extends Rally, Euro Shrugs Solid Investor Confidence

Dollar's rally continues today but buying is mainly centered against Euro, Swiss Franc and Kiwi. Euro is getting no support from better than expected investor confidence data. Thanks to some resilience in crosses, Sterling is following as the second strongest for now. Commodity currencies are trading mildly softer but...

BoE Bailey: Feb forward guidance recognizes the sale of shock, uncertainty and risks around recovery

BoE Governor Andrew Bailey said in a speech that the February forward guidance is "a recognition of the scale of the shock, the high level of uncertainty and the risks around the Covid recovery, which are still on balance distributed on the downside, though less so as time goes...

Fed’s Silence on Rising Yields Could Reawaken the Dollar

Some central banks like the ECB hit the panic button when bond yields went berserk lately, but some others such as the Fed and the Bank of England appeared rather comfortable with the moves. If this divergence persists, rate differentials between these economies could widen further, spilling over into...

A Wild Week of Metals, Yields, Stocks and Dollar

Just after DOW hit new record high in the middle of last week, the rally was choked by skyrocketing treasury yields. Dollar surprisingly ended as the strongest one for the week, followed by Euro and then Sterling. Australian Dollar suffered most as it reversed some of the month's gains....

Sunset Market Commentary

Markets Central banks stepped in to counter an aggressive selloff on bond markets but with mixed results. The Bank of Korea announced buying plans (5-7tn won) for the coming months. The Reserve Bank of Australia pulled out the big guns with an unscheduled A$3 bn purchase to defend its 3-year...

Dollar Strong as Stocks Stay in Red Even Though Yields Retreat

Even though treasury yields are retreating mildly today, stocks are staying in red in Europe and Asia. US futures point to a recovery but it's unsure if the rebound could sustain before close. Investors are digesting comments from central bank officials regarding surging real long term rates and inflation....

BoE Haldane: Greater present risk of allowing inflationary tiger out of the bag

BoE chief economist Andy Haldane said in a speech that "inflation is the tiger whose tail central banks control". The tiger has been "stirred" by "extraordinary events and policy actions of the past 12 months" due to the Covid crisis. "If risks from the virus or elsewhere prove more persistent...

BoE Broadbent: Risks to unemployment are in both directions

BoE Deputy Governor Ben Broadbent said in the TSC hearing that "it remains the case, on our central forecast, that UK economy doesn't return to its pre-pandemic size until early 2022, after the same point for both the US and the Euro area." Also, "as the furlough scheme is assumed...

BoE Haskel: Downside risk to Feb economic projections much more prevalent

BoE MPC member Jonathan Haskel said in the Treasury Committee hearing that downside risks to February central economic projections are "much more prevalent". First, "recovery of business investment could be slower than projected, if firms that have borrowed substantially over the past year delayed capital outlays to enable them...