24 Jan 2014
Flash: Carney speech on Friday creates upside risk for GBP - RBS
FXstreet.com (Bali) - According to Greg Gibbs, FX Trading Strategist at RBS, Carney speech on Friday may add upside pressure on the Sterling.
Key Quotes
"Carney speech on Friday creates upside risk for GBP."
"The FT has a remarkable article saying BoE Governor “Carney Signals scrapping of forward guidance”. The report comes from comments from Carney at the World Economic Forum in Davos in a series of TV interviews. In particular, it suggests Carney is considering scrapping the 7% unemployment threshold. The FT reports that he will outline his views fully in a speech on Friday (Carney speaks and text will be released at 12:05 GMT)."
"When asked whether the BoE was about to decrease the 7.0% unemployment threshold, as RBS and others expected, Carney said “We’re trying to get across that it’s all about overall conditions in the labour market . . . We wouldn’t want to detract from that focus by unnecessarily focusing on one indicator”
"The FT spin appears to suggest the market may be right to build in a rate hike before year end. While it reports that Carney said there is “no immediate need to increase rates”, similar to the tone in the MPC minutes released on Wednesday, it also reports Carney as saying the economy was now “in a different place”. And “If our forecast is going to be wrong, it’s better to be wrong in that direction.” (referring to surprising strength). The FT reports that he committed the BoE to undertaking a consideration of whether a rate rise was needed in the new forecasts that it would publish in February."
"The article leaves much unclear and creates much anticipation for the speech tonight. The risks appear to be towards a stronger GBP if the FT spin is correct."
Key Quotes
"Carney speech on Friday creates upside risk for GBP."
"The FT has a remarkable article saying BoE Governor “Carney Signals scrapping of forward guidance”. The report comes from comments from Carney at the World Economic Forum in Davos in a series of TV interviews. In particular, it suggests Carney is considering scrapping the 7% unemployment threshold. The FT reports that he will outline his views fully in a speech on Friday (Carney speaks and text will be released at 12:05 GMT)."
"When asked whether the BoE was about to decrease the 7.0% unemployment threshold, as RBS and others expected, Carney said “We’re trying to get across that it’s all about overall conditions in the labour market . . . We wouldn’t want to detract from that focus by unnecessarily focusing on one indicator”
"The FT spin appears to suggest the market may be right to build in a rate hike before year end. While it reports that Carney said there is “no immediate need to increase rates”, similar to the tone in the MPC minutes released on Wednesday, it also reports Carney as saying the economy was now “in a different place”. And “If our forecast is going to be wrong, it’s better to be wrong in that direction.” (referring to surprising strength). The FT reports that he committed the BoE to undertaking a consideration of whether a rate rise was needed in the new forecasts that it would publish in February."
"The article leaves much unclear and creates much anticipation for the speech tonight. The risks appear to be towards a stronger GBP if the FT spin is correct."