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Chance Of Ecb 50bp Hike Increasing

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EURObubble about to burst!

LONDON (AFX) - European government bonds were lower as strong euro zone money supply data this morning increased the possibility that the European Central Bank could raise interest rates by 50 basis points rather than the usual 25 at next week's meeting.

Official figures showed euro zone M3 rose at an annual rate of 8.8 pct in April, up from a downwardly revised 8.5 pct in March. April's reading marks the fastest pace of growth since April 2003, and comes well ahead of analysts' expectations for a rise of 8.6 pct.

ECB members have continued to stress the importance of monetary data and, while many analysts are unconvinced the central bank will go for a 50 basis point move, today's figures will certainly increase the chances of that happening.

"While there was nothing particularly new in today's data, it may raise market expectations of a 50 basis point move at next week's ECB monetary policy meeting," said Lucy Hartiss at Capital Economics.

Crucially, the three-month moving average of M3 -- the ECB's preferred target -- rose to 8.4 pct in April from 8.1 pct in March, well above the central bank's reference value of 4.5 pct.

Furthermore, speculation of a possible half point rate hike is set to intensify if data later on in the week also come in on the strong side.

Tomorrow's 'flash' estimate for euro zone May HICP inflation is expected to show the annual rate remaining at 2.4 pct, well above the ECB's target level of at or just below 2.0 pct, while the euro zone purchasing managers' survey of manufacturing activity on Thursday will also be closely watched.

Over in the UK meanwhile, gilts were also lower, tracking their European counterparts as UK investors returned to work after yesterday's public holiday.

Short Sterling down too! Chances of a rise by the MPC now sooner rather than later. July?

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I think there is a higher than being reported chance of a rise in June.

Depends on what Merv and co know about the rest of the world. If euro raise by 0.50% and US are gonna carry on up the charts, then I would say there is a 50% chance of a B of E raise here.

Lets not forget that last month they could not do anything because of the local elections. Even if Merv had wanted to get in a proactive raise last month, he would have not been able to.

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I think there is a higher than being reported chance of a rise in June.

Depends on what Merv and co know about the rest of the world. If euro raise by 0.50% and US are gonna carry on up the charts, then I would say there is a 50% chance of a B of E raise here.

Lets not forget that last month they could not do anything because of the local elections. Even if Merv had wanted to get in a proactive raise last month, he would have not been able to.

Don't know about the ECB, but I got 6 grand riding on a June 0.5% hike by the MPC! Bring on the rate hikes! I reckon that MPC may want to raise by at least 0.25% in June to head off inflation.

Edited by Charles_Darke

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I'll be surprised by a BoE rise in June, but I certainly won't be surprised to see 2 or 3 votes for it. I'd expect at least one more month of warnings from the BoE before they raise, but I don't think they can really go much past August without looking like idiots if they don't raise.

Edited by MarkG

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Don't know about the ECB, but I got 6 grand riding on a June 0.5% hike by the MPC! Bring on the rate hikes! I reckon that MPC may want to raise by at least 0.25% in June to head off inflation.

you bet 6 grand on a 0.5% hike but he MPC?

or you're set to win 6 grand if they do so?

what odds did you get?

just checked on betfair

http://www.betfair.com/Index.do

25:1 for + 0.25% 300:1 for 0.50%

you can get 20:1 for a 0.50% rise at ECB

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Slovak Central Bank has today announced a raising of their base rate by 0.5% today, effective from tomorrow morning (http://www.forbes.com/business/feeds/afx/2...afx2780213.html). It would appear that some countries are now opting to turn the screw several notches at a time!

Betfair are currently offering 24/1 for a 0.25% hike in June (I swear it was 33/1 less than a week ago?) and 299/1 for a 0.5% increase. Charles would only have to have put £20 on this option for a £6k return ... could be tempted myself!?! :ph34r:

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I think 25/1 is very generous.

Obviously no change is favourite but 25/1 is a fair bet with a fair chance of success.

Old Merv and colleagues should go put their pensions on this bet :lol::lol::lol:

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Old Merv and colleagues should go put their pensions on this bet :lol::lol::lol:

Does anyone know what they are offering for a rise in July. I'd say the odds may be shortening significantly.

I still maintain the BoE will go in August, as I've been saying for months. However, I starting to think that it may come in July. Price inflation is about to errupt!

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Charles would only have to have put £20 on this option for a £6k return ... could be tempted myself!?! :ph34r:

Waste of £20 IMO. You'd be better off putting £1k down for no change and get a guarrenteed return.

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Oh and don't forget, David Smith from the Sunday Times called Professor Steven Nickell (of Nuffield College, Oxford and a former member of the MPC) one of the UK's best economists. God help us :o

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Waste of £20 IMO. You'd be better off putting £1k down for no change and get a guarrenteed return.

most likely outcome but you lose a grand if they do put em up.

Oh and don't forget, David Smith from the Sunday Times called Professor Steven Nickell (of Nuffield College, Oxford and a former member of the MPC) one of the UK's best economists. God help us :o

but Nickell's gone now.. I wonder how quickly sentiment on the MPC can swing in the absence of his constant demands for a cut.

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I wonder how quickly sentiment on the MPC can swing in the absence of his constant demands for a cut.

It's time for Mervyn to get his wicked way and send a warning shot over the bows of No. 11 Downing Street.

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what odds did you get?

I got around 420-1 odds for 0.5% and around 30-1 on 0.25% hike. I put around £15 on each (can't remember exactly) but stand to win £6k if there's a 0.5% rise and around £500 on a 0.25% hike. Odds have shortened since then since I took up all the available money at those odds (Betfair).

I guess I could hedge my bets now but I prefer to take a gamble on it :)

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I got around 420-1 odds for 0.5% and around 30-1 on 0.25% hike. I put around £15 on each (can't remember exactly) but stand to win £6k if there's a 0.5% rise and around £500 on a 0.25% hike. Odds have shortened since then since I took up all the available money at those odds (Betfair).

I guess I could hedge my bets now but I prefer to take a gamble on it :)

I reckon if you get your 6 grand then the House Price Crash will follow very soon.

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EURObubble about to burst!

Short Sterling down too! Chances of a rise by the MPC now sooner rather than later. July?

So why are they squealing about M3 growth above 8% in Euroland? Us Brits can have over 12% growth and no one cares...

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So why are they squealing about M3 growth above 8% in Euroland? Us Brits can have over 12% growth and no one cares...

Because the MPC are Brown's muppets. At least now they seem to be growing something resembling balls... maybe Blair wants them to crash the 'miracle economy' to get Brown off his back.

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So why are they squealing about M3 growth above 8% in Euroland? Us Brits can have over 12% growth and no one cares...

the deluded fools think money supply and inflation are somehow linked :D

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So why are they squealing about M3 growth above 8% in Euroland? Us Brits can have over 12% growth and no one cares...

Thats because every country in the world is up to their eyballs in debt, budget defecits, imbalances, out of control money supply, HPI and MEW

- except UK

Our Miracle Ecomony has none of these features, only 'hard-won, locked-in stability' [weird Gordon Brown jaw-drop thing]

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I got around 420-1 odds for 0.5% and around 30-1 on 0.25% hike. I put around £15 on each

I guess I could hedge my bets now but I prefer to take a gamble on it :)

Hedging on a £30 position - gosh you high rollers... ;):lol: Irony understood.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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