19 Dec 2014
BoE under the spotlight - BAML
FXStreet (Guatemala) - Mark Capleton, at Bank of America Merrill Lynch noted their sentiment in respect of the BoE’s policies.
Key Quotes:
"Because the Bank of England tied the time it will consider unwinding QE to the first rate hike, the market believes the reinvestment of £32bn between September 2015 and January 2016 is now secure. This has surely supported the gilt rally."
"Since we still have the first hike next August, and believe a smaller first hike (say 10bp) is worth mulling over for lots of reasons, we do not think that reinvestment is a given”.
“Love it or loathe it, QE has been a great trade, making a material contribution to the debt and deficit position. The sheer strength of the market should encourage the BoE in the view that QE 'run-off' can begin soon after that first hike."
Key Quotes:
"Because the Bank of England tied the time it will consider unwinding QE to the first rate hike, the market believes the reinvestment of £32bn between September 2015 and January 2016 is now secure. This has surely supported the gilt rally."
"Since we still have the first hike next August, and believe a smaller first hike (say 10bp) is worth mulling over for lots of reasons, we do not think that reinvestment is a given”.
“Love it or loathe it, QE has been a great trade, making a material contribution to the debt and deficit position. The sheer strength of the market should encourage the BoE in the view that QE 'run-off' can begin soon after that first hike."