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Bank of Canada keeps overnight rate at 1.0%. They were upbeat on the economy but expressed caution as regards further normalization of the policy. Market was caught wrong-footed, appears to have been priced for a more explicit forward guidance in light of recent GDP and labour market reports. 1.2625 - 1.2925 range remains in play.
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Not-so-hawkish hike sends pound lower
The Bank of England hiked its official bank rate for the first time in ten years with support from all but two MPC members. The hike was widely anticipated though and the market sold this fact in the absence of a really hawkish forward guidance. The pound looks headed lower.
EUR/USD Fed Taper Effect. Last Update.
Since we're getting close to end for good the "glorious" FED QE program it's time for my last update on the famous EUR/USD Fed Taper Effect that was a good map for providing the direction for EUR/USD since beginning of the year.
You only need to watch the "technical effect" on EUR/USD, without the need to know any other details from Fed monetary policy and their next steps in order for you to be able to trade successfully EUR/USD.
You can find more details of my previous post on this subject her…
You only need to watch the "technical effect" on EUR/USD, without the need to know any other details from Fed monetary policy and their next steps in order for you to be able to trade successfully EUR/USD.
You can find more details of my previous post on this subject her…
Fed Tapers
The most awaited day of the month is here as Janet Yellen will chair her first meeting of the FOMC. In terms of market expectation the consensus is for another round of cut of $10B/month of assets purchases. Based on recent Bloomberg survey among economists 96% favors a $10B tapering (see Figure 1).
So despite the recent bad economic data from recent month due to bad weather and despite the geopolitical risk, Fed tapering should remain on autopilot and see a gradual move from his easing cycle.
T…
So despite the recent bad economic data from recent month due to bad weather and despite the geopolitical risk, Fed tapering should remain on autopilot and see a gradual move from his easing cycle.
T…
Prepering the week ahead
In comparison to last week economics events we should expect for the week ahead some pretty decent action. Although there are no major central bank meeting this week except BOJ Monetary Policy and Interest rates decision we have other data like the CPI which are measuring the inflation and have a threshold target from central bank forward guidance.
Here are the main risk events for this week that you should pay attention:
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BOE Inflation Report, Cable Analysis
Last time I've been spoken about Cable we where trading near 1.6260 support level and an important pivotal point and and that moment I was making the point that cable should rally from those levels back up, and it did, but you may be asking yourself what's next with cable? You can check out my blog post here: Clash of the Titans - BOE vs ECB
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Fed's Yellen Speach
Today it seems to be the big day for Janet Yellen as she is due to deliver her first monetary policy speech, as the New Fed Chairman, in front of Congress. I think she will continue with the current Fed's rhetoric that QE program worked and that any further reduction in the bond buying program will be "data depending". The only think we should watch is how she will respond to the fact that unemployment rate is still above Fed target and also the inflation ra…