BOE to expand QE by £100bn on Super Thursday – Nomura

Dhwani Mehta FXStreet

Analysts at Nomura believe that the Bank of England (BOE) is unlikely to adopt negative interest rates at its policy meeting this Thursday. Although the bank may expand its QE programme by £100bn.

Key quotes

“An extension of the Bank of England’s QE programme by £100bn.

We see such an expansion as representing a good balance between too little (£50bn) and too much (200bn)

While negative rates are being considered for inclusion in the Bank’s toolkit, they are unlikely to be available for use until early next year – and even then we don’t expect this policy tool to be deployed.

We expect the Bank to repeat its ECB-style guidance that the MPC does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.

Its forecasts are likely to remain conditioned on an immediate, orderly move to a comprehensive free trade agreement with the European Union on 1 January 2021.”

Related reads

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD climbs toward 0.7000 after strong China data dump

AUD/USD attracts follow-through buyers for the second straight day on Monday, extending last week's recovery toward 0.7000 in Monday's Asian trading. Strong Chniese Q3 GDP and activity data for September strengthen the pair's advance, following RBA Assistant Governor Chris Kent's hawkish remarks.

USD/JPY struggles near 158.00 amid hawkish BoJ, subdued USD

USD/JPY remains defensive near 158.00 in the Asian session on Monday, as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the pair amid BoJ Governor Kazuo Ueda's hawkish remarks. However, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and the major.

Gold holds firm below $4,200 on falling US yields

Gold holds gains but remains below the $4,200 mark in the European session on Monday. US Federal Reserve Chair Kevin Warsh’s unwillingness to provide any cues on further policy moves led to a reduction in odds for policy tightening later this month. Moreover, the recent sharp retracement slide in US government bond yields from multi-year highs, acts as a tailwind for the non-yielding bullion.

Cardano risks 15% downside as retail demand, bullish momentum wane

Cardano (ADA) is trading above $0.2200 at press time on Monday, holding steady after a 12% decline the previous week. The altcoin is losing retail interest as the notional value of active ADA futures positions declines. The technical outlook for ADA suggests a downside bias following the bearish breakout below a near-term support trendline last week.

Canada CPI expected to show a pick-up in inflation in September

Canada’s September Consumer Price Index figures will be the focus of attention on Monday. Indeed, Statistics Canada data will provide markets with an update on price pressures ahead of the Bank of Canada’s October 28 gathering, when officials are expected to keep the interest rate steady at 2.25%, broadly in line with analyst consensus. Economists expect the headline CPI to pick some upside traction at 3.2% YoY and to rise by 0.2% on a monthly basis.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.