Tag Archives: Bank of England

The meltup continues with the S&P500 set to open at new all time highs as futures rise 0.2% overnight, with European, Asian stocks higher, as job data pushed MSCI Asia Pacific Index towards highest close since Aug. 2015. Germany, U.K. economic data seen positive, with dollar, oil rising, and gold declining. Global equities advanced with commodities and emerging markets on speculation the U.S. economy is strong enough to sustain growth while only triggering a gradual increase in interest...

BofA’s Michael Hartnett points out something amusing, not to mention diabolical: following the rate cuts by the BoE & RBA this week, “global central banks have now cut rates 666 times since Lehman.” One would think this attempt by central banks to push everyone into risk assets, certainly the Swiss National Bank which as we showed yesterday has increased its US equity holdings by 50% in the first half of 2016 … …...

Swiss Franc The Swiss Franc appreciated today against the euro. Given that the Bank of England started monetary easing, this slight appreciation is unexpectedly weak – reason was probably intervention. The SNB intervention level should be around 1 billion francs. Numbers revealed in next week’s sight deposits. Click to enlarge. Bank of England The Bank of England owns today, though tomorrow will be about the US...

In spite of the Bank of England’s latest monetary stimulus, ambitious fiscal package may be needed to deal with steep drop in growth foreseen for next year On 4 August, the Bank of England (BoE) managed to beat market expectations by announcing a policy package that included a 25 bp rate cut (to 0.25%), a Term Funding Scheme (TFS) “to reinforce the pass-through” of the rate cut, a GBP60 bn increase in the bank’s purchases of government bonds, as well as up to GBP10 bn in corporate bonds...

Summary: BOE cuts rates and expands QE. Door is open to more easing. Sterling stabilizes after selling off 2 cents. Sterling has slumped two cents in the wake of the Bank of England’s announcement.  It cut the base rate 25 bp and announced a resumption of its asset purchase program.  It will buy GBP60 bln of Gilts and added corporate bonds to its purchase plan, which will be completed over the next six...

Swiss Franc Click to enlarge. FX Rates The US dollar is consolidating yesterday’s losses.  The greenback’s upticks have thus far been shallow and unimpressive, except perhaps against the New Zealand dollar, which is off 0.8% ahead of next week’s RBNZ meeting.  Softer than expected labor cost increase reinforces the conviction that a 25 bp rate cut will be delivered next week. The asset markets are more...

Summary: Notable that as the CRB Index moves lower, MSCI emerging market equities have done well. European banks are retreating after the stress test results. Tokyo elected its first women governor as this seem to be in part a sign of protest against Abe. August has begun off with clear price action.  The US dollar is stronger against nearly all the major currencies.  Bond yields are higher.  Equities and...

Summary: RBA meeting is a close call. BOE meeting consensus on rate cut, maybe new QE and lending-for-funding. More details of Japan’s fiscal policy. U.S. jobs data. After this week, and outside of RBNZ rate cut, August may be uneventful. There are four events this week that will command the attention of global investors. The Reserve of Bank of Australia is first.It is a close call, though the median in the...

Swiss Franc The euro-Swiss is moving back to reality, after the risk-on run in the beginning of the week. The continued yen weakening is slightly negative for the franc given that some algorithms correlate the two safe-haven currencies. Click to enlarge. United Kingdom After a nearly three weeks of turmoil following the UK referendum, there is now a sense of order returning to UK politics. Two elements of the new...

Summary: Electoral politics remains significant. BOE is likely to cut rates, while BoC may tilt more dovishly. US Q2 earnings season formally begins. Investors are under siege.  A growing proportion of bonds in Europe and Japan offer negative yields. The German and Japanese curves are negative out 15-years, while one cannot find a positive yield among any tenor of Swiss government bonds.   Despite a string of...