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30 Oct 2015
BoE’s Super-Thursday approaching fast – TDS
FXStreet (Delhi) – James Rossiter, Senior Global Strategist at TD Securities, notes that the upcoming week is the BoE’s second “Super-Thursday”, with the simultaneous release of the decision, vote, minutes, and Inflation Report.
Key Quotes
“For two central banks ready to pull the trigger on higher rates, we’ve seen a big divergence in tone between the Fed and BoE in recent weeks, with the Fed keeping a December hike alive while last month’s BoE minutes took a dovish slant.”
“Ultimately the decision should be a repeat of recent meetings, but as year-end approaches, we see a risk that Kristin Forbes joins Ian MacCafferty for a second vote to hike rates. While this will be interpreted as a hawkish move, it wouldn’t worry us—it’s a necessary condition as they approach an anticipated May 2016 hike.”
“Conversely, the accompanying Inflation Report could shed light on why the BoE was so dovish on its inflation forecast in last month’s minutes, and if this accompanies a downward revision to growth next year (on account of weaker EMs), this could be interpreted as somewhat dovish. Ultimately, the domestic economy remains relatively healthy and inflation is expected to converge toward 2% in 2016, leaving a May hike the most probable.”
Key Quotes
“For two central banks ready to pull the trigger on higher rates, we’ve seen a big divergence in tone between the Fed and BoE in recent weeks, with the Fed keeping a December hike alive while last month’s BoE minutes took a dovish slant.”
“Ultimately the decision should be a repeat of recent meetings, but as year-end approaches, we see a risk that Kristin Forbes joins Ian MacCafferty for a second vote to hike rates. While this will be interpreted as a hawkish move, it wouldn’t worry us—it’s a necessary condition as they approach an anticipated May 2016 hike.”
“Conversely, the accompanying Inflation Report could shed light on why the BoE was so dovish on its inflation forecast in last month’s minutes, and if this accompanies a downward revision to growth next year (on account of weaker EMs), this could be interpreted as somewhat dovish. Ultimately, the domestic economy remains relatively healthy and inflation is expected to converge toward 2% in 2016, leaving a May hike the most probable.”