Subtle signs for sterling

Sterling was sagging in early European trade as we head into today’s MPC meeting. This is really about gauging subtle shifts in MPC thinking since August, when policy was eased and a decent indication was given that it may have to be eased again later this year. On the face of it, the data has not been shifting this way, so the potential for sterling volatility is largely going to come from any change in this perception as revealed in the minutes to the meeting. Initial cable resistance comes in at 1.3164.

Talking of central banks, the SNB today kept key policy rates unchanged at their quarterly meeting, with the target for Libor remaining at -0.25%. There was no reason for the Swiss franc to get excited and it was no surprise to see the SNB re-iterating that the franc remains significantly overvalued.

Elsewhere, the latest labour market data in Australia saw a small fall in the unemployment rate to 5.6%. The Aussie was little changed, with the dollar-bloc (CAD and NZD) generally softer as we head into the FOMC meeting next week.

Did you know?

Telephones and telex used for trading quotes were replaced in 1973, as Reuters introduced computer monitors.

Word of the day
"Commodity Channel Index (CCI)" - An oscillator that determines when an asset has been overbought or oversold.
Pro Tip

Higher leverage --> Less funds required as margin / Lower leverage --> More funds required as margin

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