{"id":1055,"date":"2012-06-22T14:10:00","date_gmt":"2012-06-22T14:10:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/bondworld.ch\/home\/sites\/20b\/7\/760c69a11c\/public_html\/investmentworld.ch\/index.php\/2012\/06\/22\/forex-markets-we-have-revised-our-expectations-for-the-bank-of-englands-next-moves\/"},"modified":"2012-06-22T14:10:00","modified_gmt":"2012-06-22T14:10:00","slug":"forex-markets-we-have-revised-our-expectations-for-the-bank-of-englands-next-moves","status":"publish","type":"post","link":"https:\/\/www.investmentworld.eu\/ch\/forex-markets-we-have-revised-our-expectations-for-the-bank-of-englands-next-moves\/","title":{"rendered":"Forex markets: We have revised our expectations for the Bank of England\u2019s next moves"},"content":{"rendered":"<p style=\"text-align: justify;\">Euro: first test (Greek) passed. <span lang=\"EN-GB\">The second \u2013 and last \u2013 will comprise the big four European leaders meeting today and the European Council summit on 28-29 June<\/span><span lang=\"EN-GB\">.<\/span>..<span lang=\"EN-GB\">&#8230;<\/span><strong><span lang=\"EN-GB\"> <\/span><\/strong><strong><span lang=\"EN-GB\"> <\/span><\/strong><span lang=\"EN-GB\"> <\/span><span lang=\"en-GB\"> <\/span><span lang=\"en-GB\"> <\/span><span lang=\"EN-GB\"> <\/span><span lang=\"en-GB\"> <\/span><\/p>\n<p>  <!--more-->  <\/p>\n<ul> <\/ul>\n<hr \/>\n<p> <span style=\"font-family: arial,helvetica,sans-serif;\"><span style=\"font-size: 10pt;\"> Sign up for our free newsletter to receive weekly news from BONDWorld<br \/><a href=\"index.php?option=com_acymailing&#038;view=user&#038;Itemid=107\"><strong>Click  here to register for your free copy<\/strong><\/a><\/span> <span style=\"font-size: 10pt;\"><a href=\"index.php?option=com_acymailing&#038;view=user&#038;Itemid=1023\"><strong> <\/strong><\/a><\/span><\/span>  <\/p>\n<hr \/>\n<p style=\"text-align: justify;\"><span style=\"font-family: arial,helvetica,sans-serif;\"><span style=\"font-size: 10pt;\"><strong>For professional investors and advisers only<\/strong><\/span><\/span><\/p>\n<hr \/>\n<div style=\"text-align: justify;\">\n<div style=\"text-align: justify;\">\n<div style=\"text-align: justify;\">\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\">We  have revised our expectations for the Bank of England\u2019s next moves,  after learning that in June four Board members out of nine voted in  favour of expanding the APF. The dollar strengthened on the outcome of  the FOMC, and the yen dropped as a result, re-entering the USD\/JPY 80  area. <\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\"><strong>USD<\/strong> (nominal effective exchange rate) \u2013 The outcome of the FOMC was  supportive for the dollar, which reversed on the upside, after declining  since the beginning of the month. As well as from the Fed\u2019s activism,  the dollar also benefited from uncertainty over the euro area crisis. In  case of negative developments on the latter front, the US currency  should keep rising. Otherwise, it should simply consolidate the recovery  achieved in recent days and manage to avoid dropping to new lows.<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\"><strong>EUR <\/strong>\u2013  The euro reacted well on Monday to the outcome of the Greek elections,  climbing from EUR\/USD 1.25 to 1.27. It then stayed in this range  throughout the week, tracing it back down during Thursday\u2019s session. The  lack of concrete developments from the Eurogroup, and mounting market  expectations for an ECB interest rate cut, contributed to weakening the  exchange rate. However, there is also a technical component to the  movement. Following today\u2019s Monti-Hollande-Merkel-Rajoy meeting, the  last real test for EMU and the euro will be the European Council meeting  on 28-29 June. Next week, market trends will be conditioned \u2013 or even  distorted \u2013 by expectations ahead of this crucial event. If today\u2019s  meeting yields important developments, the euro could start the week on  the rise, returning towards 1.26- 1.27. Otherwise, it would decline, to  between 1.24 and 1.23. Resistances\/supports to look out for ahead of a  potential upside\/downside acceleration are 1.2576-95\/1.2461-41.  Subsequently, in case of positive developments on the crisis front, the  exchange rate could beat this week\u2019s highs, testing 1.2800. In the  opposite case, it could backtrack towards the 1st June low at 1.2288,  with downside extending to 1.20.<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\"><strong>GBP<\/strong> \u2013 Further important news from the UK economy, based on which we have  revised our expectations for the Bank of England\u2019s next moves, to  embrace the forecast of a new expansive monetary policy intervention on  occasion of the next meeting on 4-5 July, via an increase of the APF of  between 325 and 375 billion pounds. This is because the minutes of the  latest BoE meeting revealed that four out of nine Board members,  including Governor Mervyn King, voted in favour of expanding the APF in  June. This firm stance taken by the central bank is explained by: (1)  easing upside risks to inflation, and (2) increased downside risks to  growth, mostly traceable to the euro area crisis. Sterling dropped as a  result, from GBP\/USD 1.57 to 1.55. The decline was more contained than  it could have been, thanks to last week\u2019s announcement by the BoE and  the Chancellor of the Exchequer that a programme will be implemented in  the short term to stimulated the economy, in light of the deterioration  of the picture for the euro area. Next week, however, the trend of the  pound risks being guided mostly by the euro\u2019s, in response to the  developments of the crisis. Of forthcoming data releases, the most  important will be the final estimate of Q1 GDP, which, however, should  not have market implications, barring revisions. Otherwise, sterling is  unlikely to move of its own accord before the week after next, when the  BoE is due to meet (4-5 July).<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\"><strong>JPY <\/strong>\u2013  The yen budged only on the dollar\u2019s response to the FOMC, and dropped  from USD\/JPY 78 well into the 80 area. A \u201cdefinitive\u201d breakthrough of  USD\/JPY 80 will probably require \u201cconclusive\u201d and favourable  developments of the euro area crisis next week.<\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div style=\"text-align: justify;\"><\/div>\n<p style=\"text-align: justify;\"><span style=\"font-family: arial,helvetica,sans-serif;\"><strong> <\/strong><\/span><\/p>\n<hr \/>\n<p> <span style=\"font-family: arial,helvetica,sans-serif;\"><strong> <\/strong><\/span> <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"font-family: arial,helvetica,sans-serif;\">Appendix<br \/>An<\/span>alyst Certification<\/strong><br \/>The financial analysts who prepared this report, and whose names and roles appear on the first page, certify that: (1) The views expressed on companies mentioned herein accurately reflect independent, fair and balanced personal views; (2) No direct or indirect compensation has been or will be received in exchange for any views expressed. Specific disclosures: The analysts who prepared this report do not receive bonuses, salaries, or any other form of compensation that is based upon specific investment banking transactions.<\/p>\n<p><strong>Important Disclosures<\/strong><br \/>This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the London Stock Exchange) and Banca IMI Securities Corp (a member of the NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for the contents of this report. Please also note that Intesa Sanpaolo S.p.A. reserves the right to issue this document to its own clients. Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both authorised by the Banca d&#8217;Italia, are both regulated by the Financial Services Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.<br \/>Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or correctness. Past performance is not a guarantee of future results. The investments and strategies discussed in this research may not be suitable for all investors. If you are in any doubt you should consult your investment advisor. <br \/>This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient\u2019s own judgement.<br \/>No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities accept any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in this report. <br \/>This document may only be reproduced or published together with the name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management Policy for managing effectively the conflicts of interest which might affect the impartiality of all investment research which is held out, or where it is reasonable for the user to rely on the research, as being an impartial assessment of the value or prospects of its subject matter. A copy of this Policy is available to the recipient of this research upon making a written request to the Compliance Officer, Intesa Sanpaolo S.p.A., 90 Queen Street, London EC4N 1SA.<br \/>Intesa Sanpaolo S.p.A. has formalised a set of principles and procedures for dealing with conflicts of interest (\u201cResearch Policy\u201d). The Research Policy is clearly explained in the relevant section of Banca IMI\u2019s web site (www.bancaimi.com).<br \/>Member companies of the Intesa Sanpaolo Group, or their directors and\/or representatives and\/or employees and\/or members of their households, may have a long or short position in any securities mentioned at any time, and may make a purchase and\/or sale, or offer to make a purchase and\/or sale, of any of the securities from time to time in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and circulates research to Qualified Institutional Investors in the USA only through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167 New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This document is intended for distribution only to professional investors as defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a printed document and\/or in electronic form. Person and residents in the UK: This document is not for distribution in the United Kingdom to persons who would be defined as private customers under rules of the FSA.<br \/>US persons: This document is intended for distribution in the United States only to Qualified Institutional Investors as defined in Rule 144a of the Securities Act of 1933. US Customers wishing to effect a transaction should do so only by contacting a representative at Banca IMI Securities Corp. in the US (see contact details above). <br \/><strong><br \/>Valuation Methodology<\/strong><br \/>Trading Ideas are based on the market\u2019s expectations, investors\u2019 positioning and technical, quantitative or qualitative aspects. They take into account the key macro and market events and to what extent they have already been discounted in yields and\/or market spreads. They are also based on events which are expected to affect the market trend in terms of yields and\/or spreads in the short-medium term. The Trading Ideas may refer to both cash and derivative instruments and indicate a precise target or yield range or a yield spread between different market curves or different maturities on the same curve. The relative valuations may be in terms of yield, asset swap spreads or benchmark spreads.<br \/><strong><br \/>Coverage Policy And Frequency Of Research Reports<\/strong><br \/>Intesa Sanpaolo S.p.A. trading ideas are made in both a very short time horizon (the current day or subsequent days) or in a horizon ranging from one week to three months, in conjunction with any exceptional event that affects the issuer\u2019s operations. In the case of a short note, we advise investors to refer to the most recent report published by Intesa Sanpaolo S.p.A\u2019s Research Department for a full analysis of valuation methodology, earnings assumptions and risks. Research is available on IMI\u2019s web site (www.bancaimi.com) or by contacting your sales representative.<\/p>\n<p>Source: BONDWorld &#8211; Intesa Sanpaolo \u2013 Research Department<\/p>\n<p style=\"position: absolute; left: -10000px; top: 0px; width: 1px; height: 1px; overflow: hidden;\" id=\"_mcePaste\">Normal 0 14       MicrosoftInternetExplorer4<\/p>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Euro: first test (Greek) passed. The second \u2013 and last \u2013 will comprise the big four European leaders meeting today and the European Council summit on 28-29 June&#8230;&#8230;<\/p>\n","protected":false},"author":2,"featured_media":3458,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[22],"tags":[],"class_list":["post-1055","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-makrooekonomische-daten"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=1055"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1055\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media\/3458"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=1055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=1055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=1055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}