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16 Dec 2013
Flash: Not all FOMC, Sterling data noteworthy - BBH
FXstreet.com (London) - Strategists at BBH explained that outside of the US and euro area, there are several more events that investors will be monitoring.
Key Quotes:
“The UK has three events that will be noteworthy: the inflation report, the latest reading on the labor markets, and minutes from the recent BOE meeting”.
“Inflation expectations remain anchored, but price pressures remain sticky in the UK”.
“Of particular interest will be the effect of the previously announced increase in utility prices. The BOE’s forward guidance, like the Fed’s, has provided an unemployment threshold (7.0% vs. 6.5% for the Fed)”.
“The unemployment rate is likely to tick down to 7.5%. The UK’s participation rate has held up better than in the US (and Australia) by contrast, but the price has been lower productivity”.
“As BOE Governor Carney pointed out in NY last week, the atrophy of skills is taking place in the UK on jobs (labor has shifted from high productivity to lower productivity positions) as opposed to among the long-term unemployed, as seems to be the case elsewhere. Finally, the BOE’s minutes will be studied for clues to how forward guidance may evolve next year, especially in terms of labor market dynamics”.
Key Quotes:
“The UK has three events that will be noteworthy: the inflation report, the latest reading on the labor markets, and minutes from the recent BOE meeting”.
“Inflation expectations remain anchored, but price pressures remain sticky in the UK”.
“Of particular interest will be the effect of the previously announced increase in utility prices. The BOE’s forward guidance, like the Fed’s, has provided an unemployment threshold (7.0% vs. 6.5% for the Fed)”.
“The unemployment rate is likely to tick down to 7.5%. The UK’s participation rate has held up better than in the US (and Australia) by contrast, but the price has been lower productivity”.
“As BOE Governor Carney pointed out in NY last week, the atrophy of skills is taking place in the UK on jobs (labor has shifted from high productivity to lower productivity positions) as opposed to among the long-term unemployed, as seems to be the case elsewhere. Finally, the BOE’s minutes will be studied for clues to how forward guidance may evolve next year, especially in terms of labor market dynamics”.