Home BoE raises bar to rate hikes – TD Securities
FXStreet News

BoE raises bar to rate hikes – TD Securities

Analysts at TD Securities believe that the Bank of England took a dovish turn, as it now needs to also see “some recovery in global growth,” on top of a smooth Brexit transition, in order to raise rates in the future.

Key Quotes

“Even in the event of a smooth transition though, the Bank’s forecasts suggest that it wouldn’t need to raise rates more than once over the next three years in order to see inflation reach the 2.0% target.”

“The BoE’s incremental dovish step keeps our focus on further downside risks for sterling, but GBP has already weakened significantly in recent days. We think GBP may stabilize a bit near-term, but rallies look likely to be sold as investors seek better levels to enter or add to existing GBP shorts.”

“As expected, the BoE rhetoric was cautious and contingent on the outcome of Brexit. However, in the rates space, the overall reaction was relatively muted. From a tactical perspective, we favour receiving white/reds contracts amid the ongoing uncertainty. Further out the curve, we remain biased towards a flatter 5s30s curve.”

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.