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?

Have you ever heard of Monte Dei Paschi di Siena? Founded in 1472 in Tuscany, Italy, it is considered to be the world’s first actual bank and is still in operation today.

Word of the day
"Maturity" - The date upon which a contract must be settled.
Pro Tip

pip value in quote currency = pip in decimal places X trade size

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