30 Mar 2015
Specs pull back positions on GBP ahead of elections – BBH
FXStreet (Barcelona) - With BOE expected to remain on hold now, focus for GBP now shifts to the May 7 elections, notes the Research Team at Brown Brothers Harriman.
Key Quotes
“The UK economy has been stronger than the eurozone's but with no increase in consumer prices over the past year, the Bank of England is in no hurry to raise rates. The implied yield on the December 2016 short sterling futures contract has fallen 50 bp over the past three weeks.”
“Growth in Q4 2014 is expected to be confirmed at 0.5%, and the January index of services and the three sectorial PMIs will likely underpin expectations for similar growth in the current quarter.”
“With the BOE clearly on hold for some time, the focus turns increasingly to the May 7 elections. The one television debate that Prime Minister Cameron has agreed to will be held with six challengers on the evening on April 2.”
“The uncertainty of the election outcome is particularly acute, and this may deter market participation.”
“We note that the latest Commitment of Traders report for the week ending March 24 showed a sharp pullback by both bullish and bearish speculators.”
Key Quotes
“The UK economy has been stronger than the eurozone's but with no increase in consumer prices over the past year, the Bank of England is in no hurry to raise rates. The implied yield on the December 2016 short sterling futures contract has fallen 50 bp over the past three weeks.”
“Growth in Q4 2014 is expected to be confirmed at 0.5%, and the January index of services and the three sectorial PMIs will likely underpin expectations for similar growth in the current quarter.”
“With the BOE clearly on hold for some time, the focus turns increasingly to the May 7 elections. The one television debate that Prime Minister Cameron has agreed to will be held with six challengers on the evening on April 2.”
“The uncertainty of the election outcome is particularly acute, and this may deter market participation.”
“We note that the latest Commitment of Traders report for the week ending March 24 showed a sharp pullback by both bullish and bearish speculators.”