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Yesterday we heard the particulars of recent MPC and FOMC meetings and we got ratings action from Moody’s, with very little movement. The Pound dropped slightly following poorer than expected UK employment data but only lost ground following hard fought gains from Monday and Tuesday. Read the rest of this entry »
As expected, the committee voted 6-3 in the last meeting where they left rates unchanged at 0.5%. They also vote 8-1 to keep QE at £200bn. The minutes also gave us a view into how the MPC is thinking with members Weale and Dale seeing a case for a rate hike as “finely balanced” given the weak real economy and uncertain outlook. Their outlook for inflation has not changed over the month with near-term looking worse than February, but likely to fall in medium term assuming the banks rate rises in line with market yields.
The probability of further ECB interest rate rises in the near term increased yesterday as the Eurozone recorded another slight increase in the (core) cost of living. Given the hawkish tones (although they were slightly less so at the last meeting) of the ECB, one would expect the Euro to respond positively to the prospect of higher rates, but sentiment remains weak in light of a continuing story regarding the head of the IMF, Dominique Strauss-Kahn, and its potential impact on the ongoing sovereign debt issues. Mr Strauss-Kahn was refused bail and will remain in custody until his next hearing on the 20th May. In his absence EU financial ministers did manage to approve the €78 Billion bail-out of Portugal, the IMF providing around one third of the funds (the other two-thirds are from the 2 bail-out vehicles set up by the EU). Read the rest of this entry »
We have several US releases on the menu this week but possibly the most significant for the Greenback will be the minutes of last months FOMC meeting. Coupled with speeches by Fed officials including Bernanke, investors will be watching carefully for clues to Fed policy post the end of QE2. The Fed’s attitude at this point will be the major factor of whether the Dollar can maintain its rally over the next few weeks. The lack of encouragement in US bond yields suggests that USD drive could slow, with markets likely to shift into wide ranges over coming weeks.
Sterling moved lower against the dollar yesterday after a report showed manufacturing rose less than estimated, giving the Bank of England leeway to hold its main interest rate at a record low for longer to spur growth. Sterling also declined versus the euro, retreating from a seven week high. The Pound seems to be held back as investors view that the Bank of England will struggle to hike aggressively in the short term. It doesn’t appear that rates will go up until at least November, which will limit the ability of sterling to appreciate.
The London Office had a very strong donating performance with a grand total of £436.20 being raised during March and April. This was raised by holding an Easter Egg Raffle as well as a couple of Dress Down Thursdays to compensate for the Easter bank holidays. Adding this to the existing amount on the co-operative wall gives us a grand total of £9036. Well done, we are getting very close to 5 figures which is a fantastic achievement!
The breakdown for each charity is:
Happy Africa £204.57
Concern Worldwide £92.57
Cystic Fibrosis £139.06
During May and June we will be supporting:
Tommy’s
Salaam Balak Trust
National Animal Welfare
As always thank you for reading and I forward to receiving any charity suggestions that you might have!
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