23 Jan 2014
Flash: Data wrap- Westpac
FXstreet.com (Guatemala) - Sean Callow, FX Strategist at Westpac explained key highlights from Europe and NY taking us into the Asian session.
Key Quotes:
"The Bank of Canada held the overnight rate at 1% as expected and was very firmly neutral in the outlook: “the timing and direction of the next change to the policy rate will depend on how new information influences this balance of risks”. Those risks relate to an upgraded GDP growth forecast (from 2.3% to 2.5% for 2014), despite “lack of evidence of a rebalancing towards exports and business investment”; and a downgraded inflation view (the CPI is now expected to run below the Bank’s 1-3% target band in the near-term). CAD’s sharp reaction was to the lower inflation projection and a tweak in language, to the above reference to “direction” of rates versus the 4 Dec statement’s reference simply to policy being “appropriate”".
"UK unemployment fell to 7.1% in the three months to November from 7.7% in the three months to August. Employment grew by 280k in the latest trimester, following 250k in Jun-Aug, and that was the second strongest rise for decades, after 282k in mid 2010"
"Although earnings growth remained very subdued at 0.9% yr, the data are consistent with ongoing relatively rapid GDP growth in the second half of 2013. The unemployment rate is now just a tick above the Bank of England’s forward guidance 7% benchmark, which was seemingly anticipated in the simultaneous release of the January MPC minutes. These noted that the Committee “saw no immediate need to raise bank rate even if the 7% unemployment threshold were to be reached in the near future”, citing subdued cost pressures and persistent headwinds to growth".
Key Quotes:
"The Bank of Canada held the overnight rate at 1% as expected and was very firmly neutral in the outlook: “the timing and direction of the next change to the policy rate will depend on how new information influences this balance of risks”. Those risks relate to an upgraded GDP growth forecast (from 2.3% to 2.5% for 2014), despite “lack of evidence of a rebalancing towards exports and business investment”; and a downgraded inflation view (the CPI is now expected to run below the Bank’s 1-3% target band in the near-term). CAD’s sharp reaction was to the lower inflation projection and a tweak in language, to the above reference to “direction” of rates versus the 4 Dec statement’s reference simply to policy being “appropriate”".
"UK unemployment fell to 7.1% in the three months to November from 7.7% in the three months to August. Employment grew by 280k in the latest trimester, following 250k in Jun-Aug, and that was the second strongest rise for decades, after 282k in mid 2010"
"Although earnings growth remained very subdued at 0.9% yr, the data are consistent with ongoing relatively rapid GDP growth in the second half of 2013. The unemployment rate is now just a tick above the Bank of England’s forward guidance 7% benchmark, which was seemingly anticipated in the simultaneous release of the January MPC minutes. These noted that the Committee “saw no immediate need to raise bank rate even if the 7% unemployment threshold were to be reached in the near future”, citing subdued cost pressures and persistent headwinds to growth".