BoE instant reaction: muted
Fawad Razaqzada August 1, 2019 12:16 PM
So, the BoE left rates and QE unchanged as widely expected, an in a unanimous vote. In the Quarterly Inflation Report, the Bank has made changes to inflation and growth forecasts, raising the former and lowering the latter.
The fact that the Brexit uncertainty has risen noticeably means short-term GDP forecasts have been cut. The BoE’s projections do not include a no-deal Brexit possibility and it continues to assume a smooth Brexit scenario. If so, rate rises will be gradual and limited, according to the Bank. However, even if it is a no-deal Brexit, it does not necessarily mean rates will automatically be cut. The BoE’s response to whatever form Brexit takes will not be automatic, it says, and rates could go in either direction.
So, it was more or less a repeat of the statement in June, with minor changes. The pound has barely responded as a result. It may turn more volatile if the BoE’s Mark Carney says anything significant in his press conference, which is set to get underway in a few minutes.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.