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Cable Update (GBPUSD)

  • #408,701
  • Feb 16, 2015 10:55pm Feb 16, 2015 10:55pm
Quoting kanchmadush
{quote} yh..........and never trust centrl bankers......

Yea I mean I checked with other guys knowledgeable in these areas. They say so far, no country has raised rates with QE still going on and with falling inflation. If UK does it, they will be the first and a case study worldwide.

Also, lets not forget his mansion speech rally. What was his excuse for not raising rates last year? I cant seem to recall
  • #408,702
  • Feb 16, 2015 10:55pm Feb 16, 2015 10:55pm
Quoting kanchmadush
{quote} yh..........and never trust centrl bankers......
... and particularly not this central banker ... . Remember the "sooner than later" interest rate speech? Oh, were I to have stayed in short from the top of that ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #408,703
  • Feb 16, 2015 10:58pm Feb 16, 2015 10:58pm
Quoting ZebraSquirl
{quote} I personally don't fully understand his message. It's somewhat muddled. He says that, on the one hand, negative interest rates are "possible," but that a rate cut now would probably not be particularly productive. Why would he say that negative rates are "possible" if a cut is off the table because it would not be productive ... . (Pulls hair out).
Exactly... that is what I still dont understand. Why would negative rates and more QE be possible if next likely move is rate hike? Did we miss something?

Thanks for your analysis and yea, am hoping to see a break of .5335 soon at least. and yes, maybe they will just be more data dependent tho I find it odd if he thinks he can rate hike based on wage growth alone, and ignore falling inflation? Anyone understand his logic?
  • #408,704
  • Feb 16, 2015 10:58pm Feb 16, 2015 10:58pm
Quoting MaryAnne
{quote} Yea I mean I checked with other guys knowledgeable in these areas. They say so far, no country has raised rates with QE still going on and with falling inflation. If UK does it, they will be the first and a case study worldwide. Also, lets not forget his mansion speech rally. What was his excuse for not raising rates last year? I cant seem to recall
Although I do think that the BOJ's raising taxes, although not an interest rate hike, was akin to this kind of bizarre, counterintuitive economics.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #408,705
  • Feb 16, 2015 11:01pm Feb 16, 2015 11:01pm
Quoting ZebraSquirl
{quote} Although I do think that the BOJ's raising taxes, although not an interest rate hike, was akin to this kind of bizarre, counterintuitive economics.

BOJ? I thought Abe was offering tax cuts

As for BOE, i was not aware of the tax increase but wow.
  • #408,706
  • Feb 16, 2015 11:04pm Feb 16, 2015 11:04pm
Quoting MaryAnne
{quote} Exactly... that is what I still dont understand. Why would negative rates and more QE be possible if next likely move is rate hike? Did we miss something? Thanks for your analysis and yea, am hoping to see a break of .5335 soon at least. and yes, maybe they will just be more data dependent tho I find it odd if he thinks he can rate hike based on wage growth alone, and ignore falling inflation? Anyone understand his logic?
Curious that you mention the wage growth issue ... . I actually looked at U.K. wage growth data, and they don't appear anywhere near pre-financial crisis levels:

Attached Image (click to enlarge)
Click to Enlarge Name: U.K. Wage Growth.jpg Size: 71 KB


It's not horrible, but it's certainly not the 3-4% seen in 2007-2008 ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #408,707
  • Feb 16, 2015 11:06pm Feb 16, 2015 11:06pm
Quoting MaryAnne
{quote} BOJ? I thought Abe was offering tax cuts As for BOE, i was not aware of the tax increase but wow.
I think he first raised consumer taxes, then delayed a second raise late last year. He was proposing to lower corporate taxes ... . Don't know what came of that ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #408,708
  • Edited 11:14pm Feb 16, 2015 11:13pm | Edited 11:14pm
Quoting ZebraSquirl
{quote} Curious that you mention the wage growth issue ... . I actually looked at U.K. wage growth data, and they don't appear anywhere near pre-financial crisis levels: {image} It's not horrible, but it's certainly not the 3-4% seen in 2007-2008 ... .
Well yea, Carney did mention specifically last week that wage growth will be the focus now or something for the next "move" since there is nothing much they can do for falling or negative inflation. But then again, how can wages keep increasing if inflation keeps falling? Will bosses will happy to keep raising pay if they cant sell as high prices as they used to, due to falling inflation? I dont understand the logic.

Oh, you mean consumer taxes then yes. Abe raised it at first which actually unwound the positive QE effects, and had to delay the second proposed increase to 2016 or after I think due to waning popularity and lack of confidence in Japan itself in his Abenomics. And well, because of the proposed lower corporate tax, some Japanese MNCs like Panasonic (cant remember the others) are already considering moving HQ back to Japan which *may explain jpy increased strength* since the peak of 121.85 in UJ.
  • #408,709
  • Feb 16, 2015 11:15pm Feb 16, 2015 11:15pm
Attached Image (click to enlarge)
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  • #408,710
  • Feb 16, 2015 11:22pm Feb 16, 2015 11:22pm
Quoting MaryAnne
{quote} Well yea, Carney did mention specifically last week that wage growth will be the focus now or something for the next "move" since there is nothing much they can do for falling or negative inflation. But then again, how can wages keep increasing if inflation keeps falling? Will bosses will happy to keep raising pay if they cant sell as high prices as they used to, due to falling inflation? I dont understand the logic. Oh, you mean consumer taxes then yes. Abe raised it at first which actually unwound the positive QE effects, and had to delay...
Exactly. I think Janice Yellen mentioned a similar phenomenon here in the U.S. Wage growth will not occur given the current deflationary environment unless there is less "slack" in the labor market such that demand for workers increases and thus wages increase to attract those workers. Employers are unlikely to raise wages when consumer prices are falling if the current level of slack continues. I am unsure if he has a basic grasp of all the moving pieces ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #408,711
  • Feb 16, 2015 11:24pm Feb 16, 2015 11:24pm
Quoting zarghami
{image}
Oh, snap, someone's thinking long ... .

Too late for me to go that way ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #408,712
  • Feb 16, 2015 11:27pm Feb 16, 2015 11:27pm
Quoting zarghami
{image}
Hi Zarghami, I have similar TP as yours, but imho it may retrace first.
i will seek to reload long.
of course if i am mistaken then train will depart without me
my 2cents.
  • #408,713
  • Feb 16, 2015 11:28pm Feb 16, 2015 11:28pm
Quoting MaryAnne
{quote} 1. Well, honestly if I am a big player I would like to load monster longs from below and not at these prices. 2. Hard to see how UK can remain prosperous enough to justify a rate hike within the next 12 months if conditions in EU dont improve. Is this be a repeat of Carney's mansion speech in Jun 2014? Though back then, UK data was much better unlike now, and he still wouldnt raise rates then and instead suddenly focus on wage earnings (which was weak). 3. He mentions rate cuts and further QE being possible. Why would someone who is serious...
You did see that I said SHORT GBPUSD. I agree with everything you said.
  • #408,714
  • Feb 17, 2015 12:15am Feb 17, 2015 12:15am
Quoting Pmd1963
{quote} You did see that I said SHORT GBPUSD. I agree with everything you said.
Oh yea, I re-read your post again

Am with you on it... lets see if PVSRA works again this time, i.e. declining volume with climbing prices means big guys are not supporting price up or lack of conviction in the move up. Still pretty new on volume analysis tho and am trying to study further
  • #408,715
  • Feb 17, 2015 12:31am Feb 17, 2015 12:31am
Attached Image (click to enlarge)
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morning
  • #408,716
  • Feb 17, 2015 12:48am Feb 17, 2015 12:48am
Quoting elbert3
{image} morning
Nice catch mate.
I think gu will fall soon.
  • #408,717
  • Feb 17, 2015 12:57am Feb 17, 2015 12:57am
Quoting Idkurv
{quote} Nice catch mate. I think gu will fall soon.
I wonder if it will hit .5230 soon... and if so, where should we open longs? Do you think this is a falling knife trick, or genuine rally? Fundamentals seem to suggest further down, but you'd never know...
  • #408,718
  • Feb 17, 2015 1:07am Feb 17, 2015 1:07am
Quoting MaryAnne
{quote} I wonder if it will hit .5230 soon... and if so, where should we open longs? Do you think this is a falling knife trick, or genuine rally? Fundamentals seem to suggest further down, but you'd never know...
hi mary,

this is only my opinion but, i think that this rally has only been made on carney's words, words that didn't make sense for me such as a hike with inflation below or near zero, and made to trap all the people who entered long

i think that we will start going down making new lows or at least i hope so everything depends on CPI coming out
  • #408,719
  • Feb 17, 2015 1:08am Feb 17, 2015 1:08am
Quoting elbert3
{image} morning
Hmmm..
  • #408,720
  • Feb 17, 2015 1:13am Feb 17, 2015 1:13am
maybe we see negative CPI YoY today
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