Forum - GBP (Topic)

djellal

LAUSANNE, Switzerland

Posts: 531

13 years ago

Feb 18, 2011 19:19

long gbpchf there

said

mulhouse, France

Posts: 2822

13 years ago

Feb 18, 2011 18:13

1.62419 on pound it appears that the break above will be easy
take ur long position with 1.62360 stop loss.

bien sur ruquier des injections de vitamines. on verra ca bientot.

redstone

bristol, UK

Posted Anonymously

13 years ago

Feb 17, 2011 20:07

triple top achieved in GBP/YTL as u predicted said

Ashraf Laidi

London, UK

Posts: 0

13 years ago

Feb 16, 2011 18:43

Discussing with CNBC guests the intricacies of UK inflation, sterling & Yield spreads involving gilts and treasuries
http://bit.ly/hhuw3b

Ashraf

Ashraf Laidi

London, UK

Posts: 0

13 years ago

Feb 16, 2011 16:06

FX MARKETS ONCE AGAIN PROVE their forward-looking nature by dragging sterling across the board despite the Bank of England inflation reports upgrade of its short-term inflation outlook to 4-5% while reiterating a sub-2% CPI at the end of the 2-year period. Since the BoE is well aware of its historical tendency to underestimate inflation and overestimate growth, it continues to err on the side of caution.

*** WHAT vs HOW ****

While the what is evident; BoE to predict one-off jump in CPI, the how remains unclear. How will BoEs projected slowdown in inflation from 4-5% back to below 2% take place? Will this occur via rate hikes (which are priced in by the market but not officially by the BoE) or will it materialize via the ongoing slack in the economy and austerity policies? And when we remind that the 12% increase in sterling trade weighted since Jan 2009 should dampen the BoEs repeated claims of FX-driven inflation effects--which were mainly a case of the 2007-2009 weaknessthe case for import inflation becomes mute. Figuring out the how to weakening inflation is crucial for FX & bond markets relying on the growth and yield differential play.

Yields on both 10 and 2 year gilts are down 5 bps, while the spread between UK & US 2-year yields has weakened (UK minus US) to 0.65%--the lowest in 3 weeks. Sterling eyes more downside against the USD, but is looking the other way against EUR. GBPUSD suffered from a case of lower highs after failing to break above the Feb 7 high of $1.6180. EURGBP bounced off the 0.8360 trendline support but rebound seen capped at 0.8480-00 before the ultimate retreat back to 0.8100 as seen in the chart below.

Ashraf

DaveO

N.Cornwall, UK

Posts: 5733

13 years ago

Feb 16, 2011 15:22

Merci beaucoup monsieur et je souhaite que je pourrais mieux comprendre bon nombre de vos nigmes! Peu importe, j'apprends lentement mais trs soigneusement.

said

France

Posted Anonymously

13 years ago

Feb 16, 2011 14:19

ok daveO
i let u buy some time on the fundamentals.

DaveO

UK

Posted Anonymously

13 years ago

Feb 16, 2011 12:50

I think you will be a better judge than me for how the bond markets see the fundamentals. You are way ahead of me on understanding all the correlations. King sees the inflation as temporary which means he relies upon commodity prices stabilising (or lowering) and behaving along typical historical lines. What if commodity prices continue on up ? That must be his biggest nightmare ! To be experiencing inflation in a deleveraging and deflationary environment is very unusual and especially difficult to manage.

The global machro picture has many downside risks ! Makes it almost futile to attempt to predict anything. Muddle Through is all that anyone can do.

said

mulhouse, France

Posts: 2822

13 years ago

Feb 16, 2011 12:25

its quite an ugly picture you depicted here; what if gilt market doesnot react to boe stance on maintainig inflation at 2% and finding other line cuts in government spending? money printing and over the counter issuance of gilt. Adequacy normative procedure do allow this kind of process?
tell me more pls.

DaveO

UK

Posted Anonymously

13 years ago

Feb 16, 2011 12:08

said, I am more pessimistic for the recovery (GDP and jobs) than Osborne & Treasury will naturally publish. They have to make a positive angle. Mervyn King feels like me and sees a long very painful road ahead. What effect would a rate increase have for the uk economy? only detramental because 95% of our inflation is external so cannot be controlled. I don't see wages increasing, quite the opposite, earnings are eroding dramatically because of inflation and the prospect for jobs very poor. Its an employers market and this will be the situation for several years I think.

If we have union power growing and forcing wage increases the MPC will have to step in with rate increases. That is the main wild card imho for the next 2 years. We still have the crazy situation where the middle classes in UK do not fully appreciate the enormous size of our public debt and fiscal deficits. Nor do they understand how the bond markets could so easily take control with any loss of confidence in our ability to balance the economy and reduce debt. This is where our weakness lies, public ignorance. We have a large % of very ignorant population :-)))

The path for recovery which our new coalition government have commited is going to be extremely precarious for any GDP growth even without any anarchy and labour strikes. My opinion is they had no choice than to implement the severe austerity program. They only had very bad choices, no good choices.