Normalizing global monetary policy

Join Anyoption and take advantage of the volatility of the markets ..Start Trading TODAY!

Carney’s support of a more hawkish Bank of England policy quickly translated to the local sovereign bond market. The 2-year Britain Government Bond traded at levels reflecting around 0.82%-0.83% yield during the start of Friday’s session, versus 0.72% at the end of the previous day. The idea of less Sterling infused into the markets has also strengthened it against the dollar by an approximate 0.6%, to a level of 1.694. When this will translate to an actual policy change is a broad question. The Bank of England’s Official Bank Rate has been fixed at 0.5% for more than five years. All analysts currently surveyed on Bloomberg expect the BoE to keep rates unchanged at its upcoming rate announcement, on June 10th. On the other hand, the aforementioned rise in BoE rates means that investors see that taking place sooner or later. Economic conditions in the U.K. are generally more upbeat than those of other developed economies. For instance, the local Consumer Price Index was last published to indicate a 1.7% year over year increase of prices, after being just shy of 2% in recent months. The same cannot be said regarding many countries in the rest of the Eurozone, with a Eurozone aggregate print indicating a 0.5% annual increase of prices. The bottom line is that the path to normalizing global monetary policy goes through at least one central banker declaring economic settings as reasonable. Mark Carney may just be that central banker. Join Anyoption and take advantage of the volatility of the markets ..Start Trading TODAY!