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2 Jul 2014
Expectations for a sooner rate hike by the BoE keep growing - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, sees the BoE's first rate hike sooner than anticipated by markets.
Key Quotes
"There are no major economic releases today from Europe but this morning already we have further evidence of the strength of the UK housing market. The Nationwide House Price Index jumped 1.0% m/m, double market expectations that is sure to keep the pressure on the BOE to be seen to be acting to stem risks of a destabilising bubble forming."
"The data from yesterday was also impressive with the PMI Manufacturing index advancing to 57.5 in June from 57.0 in contrast to the expected drop. The incoming data continues to point to the BOE needing to start raising Bank Rate later this year – and we stick to our call for a November rate increase. The pound’s advance is evident against both the dollar and the euro but we expect gains to become more focused versus the euro once the dollar starts to gain traction from higher yields in the US."
Key Quotes
"There are no major economic releases today from Europe but this morning already we have further evidence of the strength of the UK housing market. The Nationwide House Price Index jumped 1.0% m/m, double market expectations that is sure to keep the pressure on the BOE to be seen to be acting to stem risks of a destabilising bubble forming."
"The data from yesterday was also impressive with the PMI Manufacturing index advancing to 57.5 in June from 57.0 in contrast to the expected drop. The incoming data continues to point to the BOE needing to start raising Bank Rate later this year – and we stick to our call for a November rate increase. The pound’s advance is evident against both the dollar and the euro but we expect gains to become more focused versus the euro once the dollar starts to gain traction from higher yields in the US."