BoE, Norges Bank remind markets liquidity.....>

FOREX: BoE, Norges Bank remind markets liquidity taps won't be on forever

- Central bank activity dominated newsflow throughout the Thursday session. The

SNB decision came and went with little consequence, with more focus was paid to

shifts in Norges Bank and Bank of England policy.

- The BoE kept rates unchanged, boosting QE by a further GBP100bln. While

boosting QE, however, the Bank slowed sharply the rate of purchases until they

reach target, prioritising stock over flow. Markets interpreted this as hawkish,

pressuring Gilt markets. Despite this, GBP slipped, leading losses across G10

currencies and pressing GBP/USD through the 50-dma and toward the $1.24 handle.

A break here opens 1.2358 support.

- In Norway, the Norges Bank also struck a hawkish tone but boosting their rate

path projections, anticipating a 25bps rate hike by the end of 2022. This helped

boost spot NOK but the clearer impact was on forward points, with the curve

moving sharply higher for tenors capturing the end of their forecast horizon.

- Focus Friday turns to UK & Canadian retail sales, Japanese inflation and the

Russian central bank rate decision. Analysts see a 100bps rate cut to 4.50%.