OctaFX | OctaFX Forex Broker
Open trading account

UK inflation consistent with MPC’s minutes – BBH

FXStreet (Delhi) – James Rossiter, Senior Global Strategist at TD Securities, notes that the UK inflation for September came in at -0.1% y/y as we expected, but weaker than market expectations of a 0.0% reading.

Key Quotes

“Core inflation prices were also a little weaker than expected, increasing 1.0% y/y. This miss seems somewhat consistent with the MPC’s minutes from last week, in which they downgraded their inflation forecast through the spring of 2016.”

“There’s lots of time between now and May (when we expect the MPC to start raising rates), and inflation is likely to start increasing relatively quickly in early 2016 as last year’s fall in oil prices falls out of the base, so we don’t read too much into this release—it’ll be the inflation releases for Dec/Jan/Feb that really help solidify the timing of the MPC's next move.”

“Elsewhere, brand new MPC member Jan Vlieghe staked out very dovish territory in front of the Treasury Select Committee this morning, saying that the GBP is unreasonably strong, and UK inflation and global growth risks are skewed to the downside. Given he’s replaced the dovish David Miles, this doesn’t really shift the balance on the MPC.”

USD/JPY mimics treasury yields

The USD/JPY pair is mimicking the moves in the US Treasury yields since the Asian session today after weak China imports data triggered a minor bout of risk aversion in the Asian and European stocks.
Read more Previous

GBP/USD in fresh lows near 1.5220

The demand for the sterling remains subdued on Tuesday, now dragging GBP/USD to test lows in sub-1.5230 levels...
Read more Next
Start livechat