I know people here listen to Jaratt Davis, but the problem with his approach is that the economy is more than the sum of what the central bankers do. Since 2008, and once the disaster was averted markets have hung on every word of the central planners.
Inflation data tends to give mixed signals, on the one hand people might enjoy that the fact that it's value is eroding less, yet on the other hand lowering inflation tends to indicate a reduced exchange of goods which often means a slowing down in the economic activity. The Davis crew will look to see what it means for central bank policy.
Interesting to see Osborn coming out and saying it was a good thing for British consumers, it might be in the short term, but if the trend is real then we could see growth come to some kind of halt. Most people are pointing to oil as being the reason why inflation is lower, but as you can see with growth figures, and other figures such as retail sales (just realised from US) and iron ore prices, it isn't oil that is causing inflation to drop - there also seems to be a weakening in demand.
Anyway, thought it was interesting to see GBPUSD end up pretty much where it left off yesterday after the news. I was short around, 1.512 and got stopped later that day. I should have just cut that position sooner, as price diverges away from news and expectations - often a good time to get out of the position. Nevertheless the position was small, pound doesn't tend to go straight down, so I was suspicious of taking a short at those levels anyway, rightfully so as it turned out.
Inflation data tends to give mixed signals, on the one hand people might enjoy that the fact that it's value is eroding less, yet on the other hand lowering inflation tends to indicate a reduced exchange of goods which often means a slowing down in the economic activity. The Davis crew will look to see what it means for central bank policy.
Interesting to see Osborn coming out and saying it was a good thing for British consumers, it might be in the short term, but if the trend is real then we could see growth come to some kind of halt. Most people are pointing to oil as being the reason why inflation is lower, but as you can see with growth figures, and other figures such as retail sales (just realised from US) and iron ore prices, it isn't oil that is causing inflation to drop - there also seems to be a weakening in demand.
Anyway, thought it was interesting to see GBPUSD end up pretty much where it left off yesterday after the news. I was short around, 1.512 and got stopped later that day. I should have just cut that position sooner, as price diverges away from news and expectations - often a good time to get out of the position. Nevertheless the position was small, pound doesn't tend to go straight down, so I was suspicious of taking a short at those levels anyway, rightfully so as it turned out.