At the US FOMC yesterday, the results were as expected by the market. The start of the reduction of quantitative easing was announced, and it was said that it would aim for the end in the middle of next year. At the Powell press conference, little information was available on rate hikes, giving the impression of a cautious stance. US stocks liked this and hit a new high again. In the foreign exchange market, yen selling has become dominant after the swing. However, while the dollar-yen pair remains in the 114-yen range in the Tokyo market, the cross-yen pair has stopped rising. After that, the results of the British Monetary Policy Committee (MPC) will be announced in the London market, and the US employment statistics will be released tomorrow.
British MPC will be the material of interest after this. Money markets have already factored in rate hikes later this year. The focus is on whether it is November this time or December next time. However, there are still many deferred expectations from economists regarding this time. Whether to keep interest rates unchanged or to raise interest rates by about 0.15% is a fifty-fifty situation. Therefore, we should assume that the pound sterling will react in either case. It seems to be a more risky situation than the US FOMC.
Inflation and growth prospects will also be announced at this British MPC. Comments from the Governor of the Bank of England, Bailey, are also noteworthy. Also, at this meeting, which will focus on interest rates, it will be necessary to check the pace of asset purchases. At the last meeting, Ramsden and Sanders argued for a reduction to £ 840bn in bond purchases and challenged the deferment. There are many highlights.
Bank of England (BOE, Central Bank of England) Interest rate announcement Last time 0.10% Forecast 0.10%
UK Central Bank Asset Purchase Program Scale Last £ 895 Billion Forecast £ 895 Billion
Summary of Agenda of the Bank of England Monetary Policy Committee (MPC)
It’s hard to predict which way it will move, but I’m sure there will be a big move. There is a possibility of shaking up and down, so if you have a position, you want to drop the lot and go carefully.