Archive for the ‘BOE’ Category
February 2, 2023
It was the week that was as three main central bank interest rate decisions from the FEDERAL RESERVE, BANK OF ENGLAND and EUROPEAN CENTRAL BANK rocked the markets. There is more to follow Friday morning as the vaunted employment data will be released. The market is expecting 190,000 jobs created, a 3.6% unemployment rate, a 34.4-hour workweek and a 0.3% gain in average hourly earnings. After all of the central bank-induced volatility that last data point carries little weight unless it shocks to the robust economic upside.
If the unemployment rate fell too much — to say, 3.3% — or AHE soared above 0.7% it would send bond yields much higher, reversing the recent sizable rally in global bond prices triggered by central banks preparing to “pause.”
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Tags:Bank of England, Christine Lagarde, European Central Bank, Federal Reserve, inflation, Jerome Powell, nonfarm payrolls, rate hikes
Posted in BOE, Debt Market, ECB, Fed | 4 Comments »
December 18, 2022
Last week, the leaders of the world’s central banks were attempting to regain their souls. FEDERAL RESERVE Chair Jerome Powell told tales of woe as workers were suffering as inflation rose. Crush the evil inflation out of the system is the battle cry in an effort to recreate the melodrama of Andrew Mellon in 1931: liquidate, liquidate, liquidate in an effort to Calvinize the evil from the economy by crushing demand. Powell did note that housing had weakened SIGNIFICANTLY and financial conditions HAVE TIGHTENED CONSIDERABLY but will have to be patient because monetary policy acts with a lag.
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Tags:BOE, Christine Lagarde, ECB, Fed, Federal Reserve, fragmentation, Jerome Powell, rate hikes, short-term rates, SNB, Thomas Jordan, US deficits, yield curves
Posted in BOE, Debt Market, ECB, Fed, SNB | 6 Comments »
February 16, 2022
Bank of England Governor Andrew Bailey made a ridiculous comment almost two weeks ago and I’d be remiss not to mention it. Bailey issued his own FORWARD GUIDANCE on how to slow the pace of inflation. He suggested that people refrain from seeking big pay raises. It’s astounding that a sitting member of the G-7 Finance Group has the temerity to restrain the AVERAGE WORKER while promoting QE policies that have stoked a serious rise in asset prices for those who own antique autos, stocks, precious metals, art, multiple homes and any other asset class on the planet.
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Tags:Andrew Bailey, balance sheet, Claudia Sahm, Federal Reserve, FOMC minutes, inflation, Jerome Powell, price controls, QT, quantitative tightening
Posted in BOE, Debt Market, Fed | 22 Comments »
July 29, 2019
On Monday night, the Bank of japan announces its policy intentions and consensus is for no change. The ECB remained on hold with promises of more liquidity to come so it is doubtful that Governor Kuroda would do anything ahead of the FED.
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Tags:BOJ, British pound, ECB, EUR/CHF, EUR/GBP, Federal Reserve, Hard Brexit, Janet Yellen, Kuroda
Posted in BOE, Currency, UK | 12 Comments »
February 10, 2019
The economic fallout from a “hard” Brexit has been debated in the media for the last few months. When I say “hard Brexit,” I mean that the U.K. leaves the European Union without any deal about trade rules, movement of people or any other binding treaty rules concerning the contemporary EU/U.K. relationship. I have refrained from forecasting outcomes because they are beyond the scope of economic analysis since it requires using models built of questionable assumptions. The British have a long history of economic intercourse intertwined with the lines of commerce from its empire.
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Tags:Bank of England, BOE, British pound, fiscal stimulus, Germany, Mark Carney, negative interest rates
Posted in BOE, Currency, Fed, UK | 17 Comments »
September 12, 2018
First, to all of those in the NOTES community who celebrate the Jewish New Year, I wish you a year of health, peace and prosperity. To those who celebrate other spiritual endeavors I offer you a wish for health, peace and prosperity. Now, to the markets. In the past month I have spent time putting issues we’ve been discussing for the last nine years into perspective. Lately, the airwaves are filled with the accolades laid upon the policy makers who SAVED CAPITALISM. Listening to Paulson, Geithner and Bernanke pontificate on how they acted to save the system is enough to send me into fits of rage as the culprits who failed to act to halt the housing bubble praise themselves for the “Courage To Act.”
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Tags:Angel Merkel, Bernanke, BOE, Chinese Yuan, ECB, Euro, Fed, Geithner, Germany, Larry Kudlow, Paulson, trade, U.S. Dollar, Yellen
Posted in BOE, ECB, Germany, trade, United States | 20 Comments »
November 2, 2017
Today, the BOE raised interest rates (as expected). But the market deemed it to be dovish and the EUR/GBP rallied 2 percent as the British pound tumbled and the euro strengthened versus the pound and dollar. On Wednesday I cautioned that the EUR/GBP failed to hold below its 200-day moving average and this provided a good technical level. As expected, the FOOTSIE index rallied more than 1 percent as investors appreciated a weaker POUND as beneficial to British corporations regardless of Brexit. The initial release of the statement revealed a 7-2 vote, which on first read was not the expected 6-3 vote so could have been a bit hawkish. But the eight paragraph statement clarified the soft-side of Governor Carney:
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Tags:BOE, British pound, EUR/GBP, Mark Carney, nonfarm payrolls
Posted in BOE, Currency, data, United States | 2 Comments »
September 14, 2017
The BOE held true to consensus and kept rates unchanged and maintained its balance sheet at 435 billion pounds, with the votes were exactly the same as the August meeting. The POUND fell on the initial headlines but the algos reversed as it was reported that there MAY be a need to raise rates due to the lessening slack in the economy. Governor Carney is reading from the Mario Draghi book, “Rules For Central Bankers.” He cited Brexit as the cause of a supply shortage because of reduced investment into the U.K. Wow! This is nonsense as stagnant wages are limiting domestic demand but Carney insists the negative fallout is constraining supply. With interest rates at record lows British firms could borrow all the cash they need to finance expansion. Carney needs BREXIT as the cover for his massive error. Remember when he panicked and cut rates following the BREXIT vote?
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Tags:BOE, British pound, euro/franc cross, euro/pound cross, Mark Carney, SNB
Posted in BOE, Currency, SNB | 2 Comments »
September 13, 2017
Thursday, the Bank of England will reveal its most recent interest rate decision. The consensus is for the BOE to leave its overnight interest rate at 0.25%. There is interest in this meeting because the British inflation data has risen and is now above Governor Mark Carney’s desired target. The most recent inflation data released on Tuesday sent GILT yields higher and put a strong bid to the British pound, pushing it to levels against the U.S. dollar unseen since the BREXIT vote. The EURO even lost ground to the British currency as the market NOW ASSUMES that the BOE will have to move to raise rates in response to rising price pressures.
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Tags:Bank of England, British pound, inflation, Mark Carney
Posted in BOE, Currency | Leave a Comment »