Gran Tour-ismo! Macro Thoughts report on UK inflation and Bank of England rate increases
Having forecast below consensus 2.6% for July UK CPI, above consensus 2.9% for August, and expecting a slight increase for September, Macro Thoughts, October 13, suggested this week’s data release, ‘should give a final confirmation (if it was needed) to the Bank of England, that a rate increase is essential’.
Weak Sterling has also become an issue for foreign investors and evidence suggests high-end London house prices are contracting and in some cases the recovery in Spanish property markets may begin to look more attractive.
Ahead of Carney cutting rates, Macro Thoughts recommended buying UK Breakeven swaps at 2.36, and covered the final profit at 3.18. Unlike the US where inflation hedging products are relatively cheap to central bank targets, (and should be considered), UK hedging is no longer cheap, (especially as the market is dominated by Pension Funds)...
Sonia change - Changes to the Sonia market have been given a start date of April 23, 2018, by the Bank of England, who will administrate the market. Rates will be fixed at 9.00am on the next day to the data collection, calculated on a volume weighted trimmed mean on trades over £25mio, (to four decimal places), based on the central 50%. For further details please contact Macro Thoughts.
www.macrothoughts.co.uk
Since 2012, top tier global Hedge, Pension, Investment and Insurance Fund managers, as well as corporates and private individuals, have benefited from Macro Thoughts’ proven insight, market commentary, hedging, and investment strategies to leverage opportunities, with positive returns on over 75% of strategies, producing double digit returns for our clients over consecutive years.
Macro Thoughts is independently researched and draws on extensive macroeconomic and market experience gained in Fixed Income, Futures, Derivatives, Bond, Forex, Commodity and Equity Index markets and from strong Global Macro investment, risk taking and strategy backgrounds. Far-reaching product knowledge across asset classes enables us to consider hedging and investment strategies that reflect our expected market trends. Macro Thoughts is directed by Keith Grindlay, whose experience spans, somewhat uniquely, both the buy and sell side, having managed trading and investment desks at top tier institutions, ensuring all strategies are evaluated for risk/reward and the optimal instrument(s) for best leveraging the strategy suggested are employed.
Globally recognised for strong analytical skills, aligned with a particular aptitude for anticipating global economic events ahead of the majority of commentators, Macro Thoughts’ independent fundamental economic research and analysis and resultant strategies have a track record that assures exceptional results, with a service that surpasses the model of bank-supplied, partisan research and stands out from the general contributions on platforms that your clients and peers already have access to. The support and value offered by Macro Thoughts, delivering written research and analysis, presentations and consulting services, is backed by decades of macroeconomic and market experience and can be tailored to your specific requirements.
Member of the Royal Economic Society & EuroIRP, the European Association of Independent Research Providers.
www.macrothoughts.co.uk
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