Daily Cable Analysis

Quoting bodge

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Did you mean to say good luck, or thanks for the pips? Hehe just joking henry, but this is a bull market.

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Quoting monarch

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Maybe like a fountain, never seen water rush up. LOL


You gotta love the Cable.

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Quoting notouch

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You shouldn't get excited about every little pullback. Considering how far we've come down in the past 2 days, a bounce is healthy for the new down trend. At the moment it's just hovering above that key 1.9723 level so it could go either way from here. If it goes higher we may see a stronger move up to one of the fibs of the whole 1.9916 - 1.9647 down move:

1.9750 (38.2)
1.9781 (50)
1.9813 (61.8)

but the overall direction is still down for the next few days and weeks.

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Quoting notouch

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You shouldn't get excited about every little pullback. Considering how far we've come down in the past 2 days, a bounce is healthy for the new down trend(considering how far up we've come in past few weeks, a pullback is healthy for the ongoing uptrend - Also, a double top would be healthier for a new downtrend or at least some consolidation). At the moment it's just hovering above that key 1.9723 level so it could go either way from here(Agreed). If it goes higher we may see a stronger move up to one of the fibs of the whole 1.9916 - 1.9647 down move:

1.9750 (38.2)
1.9781 (50)
1.9813 (61.8)

but the overall direction is still down for the next few days and weeks(Big assumption for a 1 day pullback).

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Quoting notouch

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You shouldn't get excited about every little pullback. Considering how far we've come down in the past 2 days, a bounce is healthy for the new down trend. At the moment it's just hovering above that key 1.9723 level so it could go either way from here. If it goes higher we may see a stronger move up to one of the fibs of the whole 1.9916 - 1.9647 down move:

1.9750 (38.2)
1.9781 (50)
1.9813 (61.8)

but the overall direction is still down for the next few days and weeks.

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Quoting Leugimp

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I hate copying in articles, but fundamentally, i think this one may give a little bit of clarity to the current situation.

BRITAIN

Inflation

Bad timing

Jan 18th 2007
From The Economist print edition


Now the worry is that higher pay deals may cause higher inflation to persist



...It is a tribute to the remarkable stability of inflation in the past decade that no governor has yet had to put pen to paper. But on the measure previously used for the target, Mr King's blushes would not have been spared. Until the end of 2003 the bank was instructed to keep inflation at 2.5% for retail prices excluding mortgage-interest payments. Defined this way, inflation in December was 3.8%—an overrun easily big enough to have triggered a letter.
http://www.economist.com/images/blocks/spacer.gif
A bigger concern for Mr King than these epistolary near-misses is what happened to the broader retail-prices index (RPI), which includes mortgage-interest payments. Measured this way, annual inflation jumped from 3.9% in November to 4.4% last month, the highest for 15 years and double the rate in December 2005.
This is a worry for the bank because the public regards the RPI as a more credible measure of inflation than the consumer-prices index (CPI).

...The bank's main headache is that the current bout of high RPI inflation is coinciding with a crucial period for wage negotiations. Nearly two-thirds of this year's pay deals will be hammered out in the first four months, mostly in January and April. The RPI measure of inflation is usually used as the benchmark in these negotiations. The danger is that the agreements will reflect current rates of high inflation, which will then entrench them in a classic “price-wages” upward spiral.

...Average earnings in the three months to November grew by 4.1% compared with the same period in 2005. That growth is comfortably below 4.5%, when the bank gets worried. The figures record what has been going on rather than what is about to happen, however. The first pay deals of the year, covering a fifth of the employees who settle in January, suggest grounds for concern. According to Incomes Data Services, the typical increase was 4%, sharply up on the previous 3% level. If sustained, this would jolt earnings growth above 4.5%; “pay drift” means that total earnings, which also include bonuses and overtime, tend to increase faster than basic pay.


The outcome of wage negotiations over the next few months will thus determine what happens to inflation. If demands for higher pay can be contained, then inflation should retreat in the middle of the year as lower wholesale oil and gas prices eventually bring down domestic energy costs. But if wages do move ahead decisively, then it will be harder for the bank to put inflation back into the cage, and it will have to yank up interest rates again.

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Quoting henrycarol

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I guess we have seen the highs for g/u today.

Should be going lower from now on

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