Weekly Financial Notes 18/03/2016

by Admin on March 18, 2016


UK rates remain at 0.5%
The Bank of England (BoE) decided to keep their rates on hold yesterday in particularly undramatic fashion, with the Monetary Policy Committee (MPC) voting unanimously 9-0 to keep rates unchanged and the Quantitative Easing (QE) programme at £375bn. This now marks the eighth year that interest rates have remained at the record low level of 0.5%.
Once again it was the minutes released after their meeting that interested, with the bank warning that the uncertainty of the possible Brexit had already weakened the pound. With sterling dropping 9% since last November, it is clear to understand the Bank’s worry. There are suggestions that George Osborne’s recent fiscally tight budget may ensure that the BoE keeps rates low and loose for some time to come.
With no important data out today, we look forward to next week and UK Consumer Price Index (CPI) figures as well as retail sales figures.


Inflation keeps Draghi happy

The euro started Thursday very much on the front foot following the latest FOMC statement. Gains were extended further overnight after the release of eurozone CPI numbers in February. The core year-on-year CPI reading, which excludes volatile factors such as food and energy, beat market expectations, registering 0.8% growth compared to the 0.7% analysts had expected. Additionally, month-on-month CPI also beat forecasts of 0.1% with an actual reading of 0.2%.

German inflation data came out worse than expected at -0.5% month-on-month and -3% year-on-year. It was a positive day for the single currency though as encouraging sentiment from UK policy makers boosted the GBP/EUR rate.

The last release for the week will be Eurozone labour costs for the fourth quarter at 10:00. Any reading below 1.1% will mean a third consecutive quarterly fall in this number. With a quiet afternoon in store, euro buyers will be hoping this week’s gains are maintained across the board.


Please note all speculative data is opinion based and gathered from some of the market leaders in currency exchange. R&R Ibiza will not be held responsible for any losses incurred as a result of the opinions stated or following the advice given.

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