The Bank of England in focus of the currency markets

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Apparently, we hastened to disown the lack of correlation between ruble and oil. This was true only for the growing oil and toptables in one place for the Russian currency. One-way correlation does not work, but now we’ve learned that this does not automatically mean the right to life of the phenomenon in the opposite direction. But, no!
As soon as the barrel of “black gold” stumble on the statistics on oil reserves from the US Department of energy, published yesterday, which showed the continuation of the period of their incredible volatility, and correlation magically recovered. After rising and falling of stocks during June-July in the range of 6.5 to 10 million barrels, and yesterday we again reported growth by 3.8 million barrels. American oil roller coaster continues.
Of course, in fairness, it should be noted that the ruble has corrected much more modest than the barrel: if the second fell after a report by 2.2%, the Russian currency behaved much more modest and down only 0.2%. Someone of my colleagues said “begun is half done!” Just not to jinx it: after all, the court – in the month of August with all its traditional “unpredictable”.
Meanwhile, it is expected a rather trivial event – the Bank of England Meeting on monetary policy and risking it to pass uneventfully until international analysts and the business media were not in unison to convince us of the intention of Mark Carney to make it something that does not quite fit into the laws of common sense and financial logic. Namely, the international currency traders miraculously expect that the Committee on monetary policy of great Britain (MPC) meeting today to decide on the increase in the key rate (from 0.5% to 0.75%).
For us interesting is not the fact of such expectations (it would seem that so unusual: well, I want to raise it, so what, let them raise, it’s time!), and what surrounds it.
First, the Bank of England, unlike the fed, to date, not curtailed its program of “quantitative easing” in the amount of 735 billion pounds a year. Logic dictates that if the Central Bank of any country wants to tighten monetary policy, before raising interest rates, “it would be good”, generally speaking, to curtail the asset purchase program, which acts as an additional mechanism (in addition to low rates) monetary easing. Otherwise it will turn out that the Bank of England has pressed the gas pedal, but at the same time, though, and take your foot off the brake, but forgot to disable the “hammer”.
Funny, isn’t it? Even more interesting is the intention begins to be perceived against the background of statistics on inflation of Albion, which for the year fell from 2.9% to 2.4%, i.e. the macroeconomic rationale for tightening monetary policy is also missing.
It seems that the craving for the new economy have not only a separate non-trivial companies like Tesla, but quite a reputable financial regulators of major economies in the world.
Vladimir Rojankovski,
“International financial center”