BOE Posts on Forex Blog
ECB, BOE Hold Rates Steady
Aug 7, 2008
As just about everyone expected, the Bank of England and European Central Bank have held rates steady at 5.00% and 4.25%.
The Bank of England minutes will be available at 5:30am est on August 13th.
Jean Trichet's news conference will be held at 8:30am est today.
Given that German industrial output missed by a big margin, do not expect any hawkish sentiment.
Bank of England, ECB, European Central Bank, BOE
Forex Preview August 3 - August 8
Aug 3, 2008
The core theme of the week will be rate decisions from 4 central banks and attached commentary.
Australia and US bank rates are declared on Tuesday.
On Thursday, banks in Great Britain and the Eurozone announce rate decisions.
All 4 banks are expected to remain on hold. The real market movement will come from associated statements
- The Reserve Bank of Australia (RBA) is apt to remain confident in economic growth and focus on inflationary concerns.
- the US FOMC is likely to focus on a struggling economy with inflation a secondary concern that can be dealt with later
- The Bank of England will presumably highlight a faltering economy, indicating rate cuts may be needed sooner rather than later. If their is one bank that surprises with rate movement this week, the BOE will be it with a rate cut.
- The ECB can be a wild card. Inflation remains double their mandate target. Yet, signs of a Eurozone slowdown are spreading like wildfire. With oil pulling back, their is reason to believe Trichet is going to stress a wait and see approach. However, hawkish comments on inflationary concerns remain a possibility.
Aside from the central bank action, markets are also likely to move on unemployment reports out of New Zealand on Wednesday, and Switzerland, Canada on Friday. The New Zealand report is the only significant data coming out on Wednesday, and as such may gain unusual attention.
Three other events to watch for are:
- the US PCE on Monday (I think their is potential for upside surprise).
- Eurozone Retail Sales and US ISM Services ahead of the FOMC rate decision on Tuesday
Sunday August 3
9:30pm Australia House Price Index (expect -1.3% QoQ, 8% YoY)
11pm New Zealand Commodity Price Index
Monday August 4
5am Eurozone PPI (expect 0.8% MoM, 7.9% YoY)
8:30am United States Personal Consumption Expenditure (expect 0.4% MoM, 2.2% YoY)
Tuesday August 5
12:30am Reserve Bank of Australia Rate Decision (expect hold at 7.25%)
4:30am Great Britain Industrial Production (expect 01% MoM, -1.2% YoY)
5am Eurozone Retail Sales (expect -0.6% MoM, -1.3% YoY)
10am ISM Services (expect 51.0 from 48.2, signaling growth)
2:15pm United States Fed Rate Decision (expect hold at 2%)
7pm Great Britain Consumer Confidence
Wednesday August 6
10:35am United States Crude Inventories
6:45pm New Zealand Employment Report (expect 0.2% QoQ, -0.6% YoY)
6:45pm New Zealand Unemployment Rate (expect 3.8%)
Thursday August 7
2am German Trade Balance (expect €15.5 billion)
2:45am French Trade Balance (expect €-4.6 billion)
7am Great Britain Rate Decision (expect hold at 5%)
7:45am European Central Bank Rate Decision
8:30am ECB President Trichet Press Conference
10am US Pending Home Sales (expect -1.3%)
Friday August 8
1:45am Switzerland Unemployment Rate (expect 2.3%)
4am Italy GDP (expect 0.0% QoQ, 0.3% YoY)
7am Canada Unemployment Rate (expect 6.2%)
Bank of England, ECB, European Central Bank, BOE, jobs report, RBA, upcoming reports, Fed, FOMC
FX Preview July 20 - July 25
Jul 19, 2008
This is a light weak for market data, with the most interesting reports coming out of:
Australia (PPI on Sunday, CPI Tuesday)
Canada (Retail Sales Tuesday and PPI Wednesday)
UK (BOE minutes Wednesday, Retail Sales Thursday, and Q2 GDP Friday)
Be careful getting long AUDUSD as the breakdown in oil and gold could spell trouble for the commodity based Aussie. I would stay long AUDNZD as that play is based on the comparative directions of the 2 economies.
Earnings from several regional banks and a possible diplomatic deal with Iran could be the biggest market movers for the USD.
I will be taking the next week off. Have fun trading!
Sunday July 20
9:30pm Australian PPI (expect 1.6% QoQ, 5.3% YoY)
Monday July 21
3:15am Swiss Producer and Import Prices (expect 0.5% MoM, 4.4% YoY)
time not listed Bank Of America Earnings (expect 0.53 a share)
Tuesday July 22
2:15am Swiss June Trade Balance (expect 1.6 billion)
4am Italy Trade Balance
8:10m US treasurer Hank Paulson Speaks
8:30am Canadian Retail Sales (expect 0.5% MoM)
9:30pm Australian CPI (expect 1.3% QoQ, 4.3% YoY)
time not listed Bank of Florida earnings (expect -0.01 per share)
after market close Etrade earnings (expect -0.14 per share)
after market close Washington Mutual earnings (expect -1.05 a share)
Wednesday July 23
4am Italy Retail Sales (expect 0% MoM, -0.4% YoY)
4:30am Bank of England minutes from last policy meeting
7am Canadian PPI (expect 0.5% MoM, 2.9% YoY)
7am Canadian PPI Core (expect 0.1% MoM, 1.6% YoY)
10:30am US Crude Inventories
5pm Reserve Bank of New Zealand Rate Decision (expect hold at 8.25%)
Thursday July 24
4am German IFO Survey (look for weakness mirroring the ZEW Survey last week)
4am Eurozone Current Account
4:30am UK Retail Sales (expect -2.2% MoM, 4.4% YoY)
10am US Existing Home Sales (expect 4.97 million)
7:30pm Japan CPI July
Friday July 25
4:30am UK Q2 GDP (expect 0.2% QoQ, 1.6% YoY)
8:30am US Durable Orders (expect 0%)
10am US New Home Sales (expect 507k)
10am US Michigan July Consumer Sentiment Finalized (expect 56.3)
time not supplied T Rowe Price earnings (expect 0.60 per share)
BOE, CAD, AUD, upcoming reports, RBNZ, Ifo, Pound
UK Inflation at 3.3% YoY, BOE Governor King Dovish
Jun 17, 2008
In a surprise to many Forex traders, BOE Governor Mervyn King reacted dovishly to an inflation rate of 3.3%.
In his letter, required by the 3.3% inflation reading, King stated "If the bank rate were set to bring inflation back to target... the result would be unnecessary volatility in output and employment." King went on to state inflation will remain above target into 2009 and he expects to have to write several more letters.
In reply, Chancellor Alistair Darling, stated the rise in inflation has been "extremely moderate" compared with the 1970s and 1980s.
Clearly an imminent rate hike is unlikely.
At 7:30am est the GBPUSD has fallen sharply to 1.9477
Bank of England, BOE, inflation, dove
Forex Events June 15 - June 20
Jun 15, 2008
Below is a summary of the major forex news of the week.
Cash believes the biggest events may have already occurred - a) the G8 did not intervene in the forex marketplace as some had speculated and b) flooding in the US Midwest has reduced corn and soybean crops significantly (see Bloomberg).
All times listed in eastern standard time
Monday June 16
5am
Eurozone CPI MoM (expect +0.6%)
Eurozone CPI YoY (expect +3.6%)
Eurozone Core CPI YoY (expect +1.8%)
8:30am
US Empire(NY) Manufacturing (expect -1.50
10am
Fed Chairman Bernanke Speaks before Senate
Lehman Brothers Reports Q2 Earnings (Cash expects negative news reminding everyone of last years credit crunch)
1pm
US Fed Lacker Speaks
9:30pm
Bank of Australia Minutes for June
Tuesday June 17
4:30am
UK CPI MoM (expect +0.4%)
UK CPI YoY (expect +3.2%)
UK Core CPI YoY (expect +1.5%)
5:00am
German ZEW Survey
Eurozone Trade Balance for April (expect -1.5 billion)
8:30am
US Housing Starts (expect 980k)
US Building Permits (expect 960k)
Wednesday June 18
4:30am
Bank of England Minutes for June
11am
Morgan Stanley Q2 Earnings
Thursday June 19
4:30am
UK Retail sales YoY (expect 4.1%)
UK Retail Sales MoM (expect -0.1%)
7am
Canadian CPI YoY (expect 1.9%)
Canadian CPI MoM (expect a sizzling 0.6%)
Canadian Core CPI YoY (expect 1.4%)
Canadian Core CPI MoM (expect 0.3%)
10am
US Philly Fed (expect a rise to -11.4)
Bank of England, BOE, CPI, RBA, Reserve Bank of Australia, minutes, upcoming reports, Fed
Euro, Swiss Franc, and Pound Move on Latest News
May 21, 2008
The latest round of news from Europe was generally positive for their major currencies.
First, on the heels of the ZEW President Franz's prediction of an ECB rate hike, the IFO business confidence survey was up in 3 categories - business climate, expectations, and current assessment. With that extra kick of good news, the Euro crossed the 1.570 mark, and is at 1.5768 in late trading. Having broken the $1.53 - $1.56 range, the Euro is almost defintely going to test the $1.60 level.
The Swiss also posted their share of good news, with a drop in unemployment. FX traders frequently turn to the Swiss franc when exiting carry trades, the continued global stock sell off may have been a more important macro driver today.
The minutes from the Bank of England showed that only one of nine members voted for a 25 bp rate cut on may 8. With March inflation at 0.8% and annual numbers hovering around 3%, the BOE seems to be handcuffed to a policy of rate cut aversion. However, it should be noted, that Ernst and Young Item Club member Peter Spencer has warned that inflation targeting may cripple consumers. Mr. Spencer suggests that the BOE switch to a core number that excludes energy and food (similar to the US). The Pound is at $1.9707 and may soon $2.00 again.
Bank of England, BOE, jobs report, Franc, EUR, minutes, rate hike
Forex News to Watch for May 21
May 20, 2008
Forex traders will have their eyes firmly glued to their screens for 3 key pieces of news tomorrow.
First up, the bank of England will release the minutes from their May 8th meeting. As with the Fed, the BOE will have a mighty balancing act - as they try to fight 3% inflation rates AND a slowdown. The minutes will almost certainly contain 1 vote for a 25 basis point cut. Any more vote than that will likely lead to a sell off of the Sterling.
Next will be the Canadian CPI numbers. Canada has seen a severe deterioration in their markets, and CPI is only barely expected to inch up to 1.4%. They cut rates by 50 points in April. A low CPI will all but guarantee another cut in June.
Finally, the US Fed will release minutes from their April 30th meeting at 2pm est. Futures markets indicate the Fed is likely to hold firm in June, and possibly raise rates to 2.5% by early next year. Any change on inflation sentiment - up or down - may have a dramatic effect. Given CPI numbers, the 3% annual inflation, and the hawkish comments out of Europe, I would not be surprised if we see some commentary indicating inflation is becoming a greater concern than a slow down.
Bank of England, BOE, CPI, minutes, Fed
BOE, ECB Hold Rates Steady
May 8, 2008
In moves that were largely expected, the Bank of England (BOE) and the European Central Bank (ECB) held rates steady at 5% and 4% respectively.
ECB President Jean Trichet did not produce the dovish commentary some currency traders thought might be coming. A string of bad news in Germany and throughout Europe seemed to suggest the Eurozone economy was cooling. However, Mr. Trichet held his ground, stating that inflation remained the "highest priority" (I wonder if their some German version of Cramer screaming 'They know nothing').
In England, a series of bad news also had some currency traders speculating the bank might cut by 0.25%. Like the ECB, they held to their view that inflation was the number one priority. Minutes from the BOE meeting will be released May 21, and will likely contain some votes for a rate cut.
Both currencies were largely flat against the Dollar. The Euro gained 0.0003 to close at $1.5404, the Pound was up 0.0004 to $1.9534
Read more at Yahoo on ECB and Yahoo on BOE
Bank of England, ECB, European Central Bank, BOE, interest rates
Bank of England Cuts Rates 0.25%
Apr 10, 2008
The Bank of England cut rates 0.25% to 5% on Thursday, as was largely expected. This is the 3rd rate cut since December 07,and is a full 0.75% lower than the peak rate of 5.75%.
In response, many of the UK's mortgage lenders announced their intention to cut mortgage rates by a full 0.25%. On Tuesday the Halifax reported that house prices had fallen 2.5% in March, making it the largest month-to-month decline since September 1992.
Read more at the BBC
Bank of England, BOE
