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29 Sep 2014
BoE and Sterling key players this week - RBS
FXStreet (Guatemala) - Markets anticipate that the BoE is on track to exit emergency levels of interest rates early next year.
Key Quotes:
“That helps to reduce FX market focus on the UK triple imbalances (current account, fiscal deficit & household debt) and increasingly noisy politics. But if the BoE doesn't deliver and/or a tightening Fed dilutes the attractiveness of the carry trade, such medium term risks may hurt GBP sentiment”.
“This week's UK GDP report will include revisions for previous years. BoE Governor Mark Carney has said that by themselves they are unlikely to affect the outlook for inflation materially. However, revised current account revisions (back to 1997) may well leave a nastier taste”.
“We already know the deterioration in the UK Balance of Payments position will now be shown to have started earlier. With another hefty deficit likely for Q2:14, the report should make for worrying reading for those that hold strategic GBP longs. For now, positive short-term capital flows may over-shadow the BoP data. But if yields drop for some reason, the UK's triple imbalances could become a focus again”.
Key Quotes:
“That helps to reduce FX market focus on the UK triple imbalances (current account, fiscal deficit & household debt) and increasingly noisy politics. But if the BoE doesn't deliver and/or a tightening Fed dilutes the attractiveness of the carry trade, such medium term risks may hurt GBP sentiment”.
“This week's UK GDP report will include revisions for previous years. BoE Governor Mark Carney has said that by themselves they are unlikely to affect the outlook for inflation materially. However, revised current account revisions (back to 1997) may well leave a nastier taste”.
“We already know the deterioration in the UK Balance of Payments position will now be shown to have started earlier. With another hefty deficit likely for Q2:14, the report should make for worrying reading for those that hold strategic GBP longs. For now, positive short-term capital flows may over-shadow the BoP data. But if yields drop for some reason, the UK's triple imbalances could become a focus again”.