NY Open: Carney crushes cable
FX Trader, Loonieviews.net
Britney Spears made a hit of “Oops, I did it again” in 2000; 18 years later, Bank of England Governor Mark Carney performed his own thematic cover, leaving sterling traders nearly one Big Figure lower versus the greenback after the BoE governor's post-'Super Thursday' presser.
The BoE raised UK interest rates from 0.50% to 0.75% as was widely expected. The decision was unanimous, which was a bit of a surprise. The existing QE program was unchanged. The monetary policy summary was upbeat, predicting GDP growth of 1.75% over the forecast period and projected further tightening ahead.
Initially, GBPUSD soared, spiking from 1.3070 to 1.3127... then Carney started talking.
He said “monetary policy needs to walk not run to stand still”. GBPUSD traders heard “future rate hikes will be at a slow pace.” GBPUSD collapsed from 1.3127 to 1.3017 before profit-taking lifted prices to 1.3055.
The US dollar enjoyed a firm opening in New York this morning with gains across the board except against the Japanese yen. The US threat for 25% tariffs on Chinese imports, and yesterday’s modestly hawkish Federal Open Market Committee statement, saw USD flatten out from its overnight gains (except, of course, against the pound).
FX markets look like they are willing to sit on the sidelines until tomorrows US nonfarm payrolls data. Analysts are predicting a gain of 190,000 jobs. Some traders are expecting an upside surprise after Wednesday’ strong ADP employment change report.
US economic reports did not have any impact on FX trading. Jobless Claims were slightly better than forecast at 218,000 (forecast 220,000) while June Factory orders rose 0.7% month-on-month, as expected.
Wall Street is trading with a confused tone. The Dow Jones Industrial Average is down on trade risks, the S&P 500 is flat, and Tesla (TSLA: NASDAQ) helped lift the Nasdaq. Oil prices surged with WTI climbing from $67.26 to $68.16.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.