Posts Tagged ‘Bank of England’
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 »
November 6, 2020
On Wednesday, I had a long discussion over Zoom with the eminent Gary Shilling, courtesy of FRA. There is much we agree on but as my readers are aware, my view on a coming deflationary spiral is measured as a low probability outcome of the current financial and economic situation. If deflation were to take hold it would be deemed a major failure of FEDERAL RESERVE policy aided and abetted by 535 fools on Capitol Hill. Before getting to the PODCAST, I offer up this advice on this week of major macro-economic importance (and NO, NOT THE U.S. ELECTION). There were three central bank meetings this week: The Reserve Bank of Australia; the Bank of England; and the Fed.
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Tags:Australian dollar, Bank of England, British pound, Federal Reserve, Reserve Bank of Australia, U.S. Dollar
Posted in Central Banks, Currency | 15 Comments »
December 22, 2019
As we head into the global macro uncertainty of 2020, equity markets continue to elevate due to central bank liquidity additions. One year ago, U.S. equities suffered large losses, which some attributed to the FED firing its DOUBLE SHOTGUN of interest rate increases with QUANTITATIVE TIGHTENING (Druckenmiller/Boockvar).
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Tags:Bank of England, Bank of Japan, ECB, Federal Reserve, global equities, Jerome Powell, Keynes, QE, Riksbanken, Swiss National Bank, Thomas Jordan
Posted in Central Banks, Equity | 23 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 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 »
September 17, 2013
If the FED deems the market to be healthier than conventional wisdom it will TAPER to the high-end of market expectations–$20 billion and probably in Treasuries, not MBS as of now. A supposition must be made: If the FED were to do nothing, would the stock market first rally and then break as investors fear that the FED is afraid of a weaker economy in the months ahead? The FED therefore has to TAPER so as not upset the positive spin that has helped the stock market and other assets rally. Because the FED HAS TO TAPER the emphasis will be on academia’s newest catch phrase: FORWARD GUIDANCE. This phrase has been all the rage in the ECB, Bank of England and the BOJ press conferences. Its main thrust is that the central bank can DIRECT market behavior by talking the global economy into a glide path of growth by promising the continued supply of easy money and low interest rates.
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Tags:Angela Merkel, Bank of England, ECB, Fed, FOMC, forward guidance, Germany, taper, Wolfgang Schaeuble
Posted in Fed, Germany | 6 Comments »
September 4, 2013
Yesterday, I had a global macro session with some of the best users of the Notes From Underground. They are disciplined in pursuit of profit but as most of my readers try to do, pursue causation as a prelude to correlation. Carl had prepared a white board chart of all of the relevant events that are set to play out in September. April may be the cruelest month but September 2013 will certainly give T.S. Eliot’s poem a run for the grand title. The desire to anticipate any of the events may lead to a “wasteland” of capital. So thanks to Carl, let me restate the list of events:
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Tags:Australian elections, Bank of Canada, Bank of England, Ben Bernanke, British pound, ECB, Euro, Fed, G-20, German elections, Janet Yellen, Larry Summers, Mark Carney, nonfarm payrolls, QE, RBA, Russia, tapering
Posted in BOC, BOE, Central Banks, ECB, Fed, G-20, RBA, Russia, unemployment | 7 Comments »
June 20, 2012
In the very anticipated FOMC release, the FED announced that the Operation Twist would be extended from the June expiration until the end of the year. No surprise as Bernanke seemed to believe that the FED had to do something about the lethargic growth in the economy. Listening to the press conference held after the FOMC release, it seems that Ben Bernanke is the most troubled man in America. All of the FED‘s actions during the last two years have failed to generate the robust growth that TEXTBOOK MODELS HAVE PREDICTED. Europe continues to be the main theme as to why the GLOBAL ECONOMY IS FAILING TO GAIN ANY REAL TRACTION. Europe continues to plague the world as capital investment languishes in fear of European debt problems causing a massive new round of deleveraging.
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Tags:Angela Merkel, Bank of England, BOJ, Dollar Swap Lines, Fed, FOMC, Japanese yen, operation twist
Posted in BOE, BoJ, Fed | 8 Comments »
August 11, 2011
Yesterday the screen watching and the trading became so exhaustive that my eyes glazed over and all of the quote boxes began melting together as if Salvador Dali was painting what I was analyzing and trading. Trading fatigue has definitely set in as the world moves from crisis to crisis and back again. The amount of news that gathers on my screen every hour reminds me of being back in graduate school, except that the tension now and the speed at which it arises overwhelms the mind. Not complaining as this is the way I have chosen to make my living.
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Tags:Bank of England, bond vigilantes, Canadian Dollar, ECB, Euro, Gold, Loonie, Salvador Dali, Sarkozy, short selling, SNB, socgen, Swiss Franc, Trichet
Posted in Commodities, Currency, Europe, France, Gold | 14 Comments »
March 11, 2011
The ratings agencies are awakening to the idea that there are major problems in the European sovereign debt markets. Moody’s downgrade is insignificant as Spain still holds a comfortable investment grade, Aa2, so from a financial viewpoint the demerit is a mere mark on its transcript. Rather than affecting Spain, the move by Moody’s raises the question: where have you been?
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Tags:Bank of England, Dollar, Euro, European Stability Mechanim, Eurozone Summit, Moody's, Pound, Spain
Posted in Debt Market, Europe, UK, United States | 3 Comments »