Friday, Jul 27, 2007
IR rises to be put on hold for now
The Telegraph: World markets plunge as fears rise
"The dramatic falls also make it all but certain that the Bank of England's Monetary Policy Committee will opt to leave interest rates unchanged at its meeting next week, economists said."
More importantly is Japan's IR decision in August - will they hold off.
My guess is that stocks are heavily oversold in the short-term at least. Once stocks rally a bit then Japan may raise its IRs then. The carnage to start proper in the Autumn.
Posted by sold 2 rent 1 @ 06:48 AM (207 views) Add Comment
5 Comments
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1. paul said...
And if sterling continues to slide?
2. Scott said...
Of course they will hold. They would not vote a rise straight after a rise, they would lose credibility. However, rates will hit 6% by the end of the year because even after the August decision there will be 4 months between now and then.
3. Mark said...
we all run off to bush world and buy cheap houses...lol
4. planning4acrash said...
The higher IR's go, the more squeamish the Doves become. I agree with sold 2 rent, there will be heated discussions at the MPC for sure.
5. sold 2 rent 1 said...
paul,
What we are seeing here is a repeat of what happened back in Feb/March.
Sterling fell from 1.96 to 192 back then. Remember it is on the back end of the yen carry trades.
The liquidity crisis is evolving.
Sterling may slide some more but once the markets finds support we will see a rally again.
Not sure if we will see new highs in stocks. All this volatility is gearing up for a biggie later this year.
I wonder how stoatgobbler is getting on with his USD 2.10 spread bets.
That could be a bridge too far.