Asking the Right Questions
Central bank liquidity keeps everyone dancing
While the Bank of England (BOE) surprised markets by holding interest rates steady in July, the Bank announced an aggressive package of measures at their meeting on Thursday that had financial markets salivating once again. This package, intended to lower the cost of borrowing…
Central bank policy has its limits
Central bank policy remains the predominant theme in financial markets, hence when the leaders of these institutions speak everyone listens. Last week, ECB President Mario Draghi gave a speech entitled “The International Dimension of Monetary Policy”, in which he subtly warned of the risk…
US Fed Policy: A Much More ‘Gradual’ Path
Global equity markets sold off sharply last week, as weak economic data outweighed the recent positivity generated by the prospect of more easing from the Bank of Japan (BOJ) and the European Central Bank (ECB). Much of the focus was on the US, as…
Weekly Market Recap: W/E November 6th 2015
Market Recap Most of the major equity indices ended last week in positive territory, but the big move came in the bond markets with yields moving sharply higher. Helping to push yields higher was the much stronger than expected jobs data from the US…
Super-Thursday: Carney keeps the party going
Thursday marked the beginning of a new approach to monetary policy communications from the Bank of England (BOE), simultaneously releasing their decision on interest rates, the minutes from that meeting and the quarterly inflation report, which sets out detailed economic analysis and inflation projections…
Has the world gone mad, or is it me?
These words from Ben Howard, the immensely talented singer-songwriter, ring in my head when I think about how much financial markets have been conditioned to respond to monetary stimulus. While central banks have engineered risk free rates on cash to zero (or negative in…
Bank of England Inflation Report: Halloween Theme
In his latest inflation report press conference, Mark Carney, Governor of the Bank of England (BOE), struck a Halloween theme in his opening remarks. Since the last meeting he confirmed that “indicators across much of the advanced and emerging world have been moribund”, adding…
QE to infinity!
Memories of 2008… On Wednesday the volatility in financial markets had many recounting their memories of 2008. The CBOE Volatility Index (VIX), a key measure of market expectations of near-term volatility and termed the ‘fear index’, spiked to 30.88, up from 12.03 on September…
“We need balance. Its absence can have serious consequences”
In a recent speech Bank of England governor Mark Carney said the challenge now facing the Bank is turning the UK economic recovery into a “durable expansion”. He emphasised: “To do so, we need balance. Its absence can have serious consequences”. Balance is just…
Bank of England Inflation Report
In his latest inflation report press conference, Mark Carney, Governor of the Bank of England (BOE), concluded that the UK economy “is returning to a semblance of normality”. The BOE have reduced their central estimate of “slack” in the economy to around 1% of…
