© 1982-2022 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial
LATAM FX

Price Signal Summary: USDMXN Heads South

EQUITIES

US cash open calls

STIR

Effective Fed Funds Rate

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
Trending Top 5
Topics

Forward guidance strengthened

BOE
BulletMarketsFixed IncomeForeign Exchange
  • The forward guidance language is stronger than previously. It is now: "The scale, pace and timing of any further increases in Bank Rate would reflect the Committee’s assessment of the economic outlook and inflationary pressures. The Committee would be particularly alert to indications of more persistent inflationary pressures, and would if necessary act forcefully in response."
  • Previously it was: "Most members of the Committee judge that some degree of further tightening in monetary policy may still be appropriate in the coming months. There are risks on both sides of that judgement and a range of views among these members on the balance of risks. The MPC will continue to review developments in the light of incoming data and their implications for medium-term inflation."
  • There are a few ways the guidance has been strengthened:
    1. Risks are now seen to the upside
    2. The BOE is opening the door open to 50bp hikes by mentioning the "scale" of hikes
    3. There is no caveat that the guidance is only supported by "some members" (which was 7 members in May)
    4. This part in itself is also particularly hawkish: "would if necessary act forcefully in response."
184 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • The forward guidance language is stronger than previously. It is now: "The scale, pace and timing of any further increases in Bank Rate would reflect the Committee’s assessment of the economic outlook and inflationary pressures. The Committee would be particularly alert to indications of more persistent inflationary pressures, and would if necessary act forcefully in response."
  • Previously it was: "Most members of the Committee judge that some degree of further tightening in monetary policy may still be appropriate in the coming months. There are risks on both sides of that judgement and a range of views among these members on the balance of risks. The MPC will continue to review developments in the light of incoming data and their implications for medium-term inflation."
  • There are a few ways the guidance has been strengthened:
    1. Risks are now seen to the upside
    2. The BOE is opening the door open to 50bp hikes by mentioning the "scale" of hikes
    3. There is no caveat that the guidance is only supported by "some members" (which was 7 members in May)
    4. This part in itself is also particularly hawkish: "would if necessary act forcefully in response."