Recap 8-13-13




  • BoE minutes showed the guidance vote at 8-1. Martin Weale dissented, as he “saw a particularly compelling need to do more to manage the risk that forward guidance could lead to an increase in medium-term inflation expectations, by setting an even shorter time horizon.” Excerpts:
  1. UK short-term market interest rates remained higher than at the time of the May Inflation Report; and while some rise since May might be justified, most members judged that the extent of the increase remained greater than could be reconciled with the improvement in the economic outlook. Other members did not think market interest rates were obviously out of line with their view of the outlook.
  2. All members agreed that, while it was in place, forward guidance should provide the framework and context for future monetary policy discussions.
  3. Most members continued to believe that further monetary stimulus in the form of asset purchases was not appropriate at the current juncture; and that the onus on monetary policy was to reinforce the recovery by ensuring that stimulus was not withdrawn prematurely.

UK Jobless Claims dropped to -29.2k vs -15k exp and -21.2k prev. Average Weekly Earnings also rose faster than expected, although the ILO Unemployment figure remained stable at 7.8% as exp.

Upcoming Data:

  • Thu: UK Retail Sales, US Jobless Claims, CPI, NAHB Survey, Philly Fed
  • Fri: US Labor Costs, Housing Starts
  • Mon: Japan Trade Balance, RBA Minutes
  • Tue: Chicago Fed National Activity index
  • Wed: US Existing home Sales, China HSBC Mfg Flash PMI