Carney sinks the Pound

Yesterday’s markets

21st June 2017

  • AUD - Monetary Policy Meeting Minutes
  • CHF - SNB Chairman Jordan Speaks
  • USD - FOMC Member Kaplan Speaks 

Bank of England governor Mark Carney addressed markets yesterday in his Mansion House Speech. Carney’s dovish tone was noted as he went on to say that “now is not the time to raise rates” suggesting the central bank remain accommodating in terms of their monetary policy. Carney bucked the hawkish BoE trend we saw last week after the surprise split 5-3 vote. Sterling depreciated substantially after Carney’s speech, tumbling against the majority of its counterparties.

Across the pond, the Greenback rallied after two hawkish speeches by FOMC members. New York Fed President, William Dudley, expressed confidence in the expansion having a long way to go. Charles Evans, whose normal dovish tone was replaced with more hawkish comments, suggested they should show the public they are not an overly conservative central bank. However, Evans did mention the ‘current environment supports very gradual rate hikes.’ Robert Kaplan spoke with a more dovish tone last night saying low bond yields warrant care on further rate hikes. Kaplan also suggested that he would want to see evidence that the slowdown in inflation is temporary.

Today’s markets

20th June 2017

  • USD - Crude Oil Inventories
  • NZD - Official Cash Rate
  • NZD - RBNZ Rate Statement

Today there is little high tier data being released. From the UK, the public-sector net borrowing figure is expected to drop to 7.3B from 9.6B last month. Also, MPC member Andy Haldane will be speaking around midday. The Queen’s Speech, which was rescheduled due to the delays in the deal between the Conservative party and DUP, is to take place today at 11:30 BST. From the US, the existing home sales figure will be released as well as the crude oil inventories figure.