Search
0
0
Monetary−policy meeting at the Bank of England
Tue, Jun 3 2008, 13:08 GMT
by Morten Lykke Pedersen
Current interest rate: 5%
JB expectations: unchanged interest rates
Market expectations: unchanged interest rates
• In favour of unchanged rates:
- • The inflation rate is above target
- • High inflation expectations
• In favour of an interest-rate cut:
- • Growth is slowing
- • Weak housing market
- • Consumer confidence at 20-year low
We do not expect the Bank of England (BoE) to change interest rates this time around, and we do not expect a cut until later in the year.
Published on Tue, Jun 3 2008, 13:08 GMT
0
0
Monetary−policy meeting at the Bank of England
Wed, May 7 2008, 07:07 GMT
by Morten Lykke Pedersen
Current interest rate: 5%
• In favour of unchanged interest rates:
- • The inflation risk is on the upside
- • There has been less focus on the financial turbulence this past month
- • The Bank of England (BoE) has announced that the worst is over
• In favour of a 25 bp cut:
- • The housing market is softening
- • Growth indicators are pointing downwards
Market expectation: no change
Jyske Bank’s expectation: no change
Published on Wed, May 7 2008, 07:07 GMT
0
0
Monetary−policy meeting at the Bank of England
Wed, Apr 9 2008, 12:13 GMT
by Morten Lykke Pedersen
Interest-rate announcement
Current interest rate: 5.25%
• In favour of unchanged interest rates:
- • Inflation may stay above the target.
- • Decent retail sales data in recent months.
• In favour of a cut (-25 bp):
- • Risk of drastic slowdown in growth
- • Slowdown in the housing market
- • Continuing financial turmoil
Our expectation: interest rates left unchanged at 5.25%
Published on Wed, Apr 9 2008, 12:13 GMT
0
0
Monetary−policy meeting at the Bank of England
Tue, Feb 5 2008, 10:41 GMT
by Morten Lykke Pedersen
Interest-rate announcement
Current interest rate level: 5.50%
- • The inflation rate is above the BoE's target
- • Higher-than-expected Q4 growth.
• In favour of 25 bp cut:
- • PMI the lowest it has been since 2005
- • Growth expected to slow in 2008
- • High short-term inflation perhaps less important than growth
At its monetary-policy meeting in January, the Bank of England (BoE) chose to leave interest rates unchanged. However, the minutes of the meeting at the monetary-policy committee and the latest economic data indicate that interest rates will be lowered again after the quarter-point cut in December.
Lately the inflation rate has been hovering just above the BoE's target, and this picture was unchanged in January. Moreover, the growth rate for the last quarter was higher than expected which, together with the inflation rate, indicates that interest rates will be left unchanged. However, PMI Manufacturing was the lowest it had been since August 2005, and growth in 2008 is expected to be significantly lower than in 2007. Also, we find that the inflation risk is short term. Other things being equal, the weak PMI supports expectations that the BoE will lower interest rates at the meeting next week. Moreover, in our view the prospect of slower growth will carry more weight with the members of the monetarypolicy committee than the risk of higher inflation for the short term. Overall, it means that we expect the BoE to lower interest rates by 25 bp.
Market participants have fully discounted an interest-rate cut of 25 bp, and if the BoE does not deliver, it will be a great disappointment. Probably the BoE like the Fed will be wary of disappointing the markets, which could cause a fall in equity prices and renewed financial turbulence. Market participants expect more interest-rate cuts in 2008 and discount a Base Rate of around 4.75% at mid-2008. The BoE would have to be surprisingly negative about interest rates before market rates fall from their current level.
Since the credit crisis exploded in August, GBP has been hit hard because of a softening housing market, generally poorer economic indicators and the problems over Northern Rock. Interest rates have been falling over the period, and at one time we wondered whether any more misery could be discounted in the yield curve and the currency. The answer came at mid-January, and towards the end of January, GBP was trading in a relatively narrow range, with the EUR/GBP rate at between 73.88 and approx. 75. M&A activities played a role in the narrow range trading, and we are convinced that GBP may well weaken further. Even so, we maintain our neutral short-term view on GBP, since the EUR/GBP rate has difficulties in breaking out of the above-mentioned range.
Published on Tue, Feb 5 2008, 10:46 GMT
Jyske Bank
| Vestergade 8-16, DK-8600 Silkeborg
http://www.jyskebank.com | jyskebank@jyskebank.dk
Legal disclaimer and risk disclosure
The analysis is based on information which Jyske Bank finds reliable, but Jyske Bank does not assume any responsibility for the correctness of the material nor for transactions made on the basis of the information or the estimates of the analysis. The estimates and recommendations of the analysis may be changed without notice. The analysis is for the personal use of Jyske Bank's customers and may not be copied.Interested in forex trading? forex brokerage firms!
FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)
[Read Premium full description]
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2008 "FXstreet.com. The Forex Market" All Rights Reserved.