Although growth and inflation have tracked somewhat below the forecasts made in the (November) Inflation Report, the magnitude has not been seen as sufficient to warrant a fine-tuning on the rate front. |
Certainly, the tone of the Inflation Report did not hint at such a pronounced division within the central bank, but rather one where the majority is content to overlook shortfalls in economic activity in an environment where inflation is tracking close to target and expected to continue doing so over the forecast horizon. |
Given the Bank of England's apparent wariness about the accuracy of this initial (GDP) estimate, it is questionable whether it will have much of a bearing on policy decisions. |
I don't see (Snow) deviating from the same script at all this week. |
I'd be a bit nervous about the pound's rally recently. We've not seen enough evidence of a pickup in growth and the focus is still on the next rate cut, which I think we'll get in February. |
If the BOJ can deliver an exit strategy without creating undue political friction, it could be the catalyst for some associated recovery in the yen, a move that will only be amplified, the more stretched the speculative market allows itself to become. |
In the end, rates are set to rise and it would be a mistake to see recent comments as a commitment to keeping rates unchanged for a prolonged period -- low, yes, but not unchanged. |
It's not clear what will happen to Europe. A lot of questions have been raised by this vote and none of this is immediately positive. |
None of this will ease concerns for those at the Bank of England nervous about the outlook for consumption in the months ahead, particularly after the loss of momentum early this year. |
One month's out performance does not mean the long-awaited consumer revival has arrived. |
Structural nervousness creeps into the market from time to time but interest rates still favor the dollar. |
The dollar is drifting downwards. There is an inclination to sell dollars -- the current account deficit is the underlying concern. We need to see a big upward surprise in U.S. data to change the sentiment. |
The Fed is going to keep going. |
The interesting aspect of the market reaction to the generally strong data released today is that the upside surprises have failed to provide any upward impetus to the dollar. |
The language from the ECB suggests they are not promising to do anything but they are not promising not to do anything either. The market will seize on anything that suggests a greater chance of a December rate hike. |