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Markets Didn't Like The Interest Rate Change

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Wall Street might buckle today if the futures are anything to go by:

http://www.msnbc.msn.com/id/14166619/

Wall Street seen lower as earnings disappoint

Financial Times

By John O'Doherty in New York
Updated: 9:12 a.m. ET Aug. 3, 2006
Wall Street was set to open lower on Thursday as investors were made anxious by disappointing earnings news as well as a surprise decision by the Bank of England to raise interest rates.

My bet is that the correction that began in May is not over yet with quite a few more bumps in the road to come. If oil starts to move toward $80 again....................... :o

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FTSE 100 5,830.30 -101.80 -1.72%

And all because of a small .25% hike????

Sterling is going in the opposite direction which will not help our exports:

1 U.K. £ =

1 US$= 1.8897 Euro= 1.4746

Even gold dropped as sterling soars:

GOLD

08/03/2006

10:52

644.10

645.60

-7.70

-1.18%

Edited by Realistbear

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Still like this graph, although it was slated on the board.

http://www.housepricecrash.co.uk/forum/ind...st&p=405882

Whadayathink?

IMO its 1987 all over again but with an accelerated HPC. Last time the lag was a long 17 months or so. The graph bears some remarkable similarities.

The May correction began due to oil, conflict in the ME, IR hikes worldwide and, possibly, the BoJ tightening world credit. All of those factors are still with us and perhaps even worse. Wall Street will lead and recession will follow the housing market down.

Despite the recent rally I am still very light on stocks and cash heavy and do not intend changing anytime soon.

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Well, it really does seem that the financial markets were indeed surprised by this move. Then again, so was I!

Props should be given to the MPC (or at least four of them) for having the gumption to do this. Let's hope this same gumption is not diluted by two more Brownite apologists when they join up.

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Have you seen interest rate futures? Expecting more hikes now...

http://www.futuresource.com/quotes/quotes.jsp?s=LSS

Ah ha! I keep hearing people talk about interest rate futures and am glad to have a link - although I don't understand what is being shown. I would appreciate any tips about how to read it.

I have been taking an occasional look at Gilt yields:

http://newsvote.bbc.co.uk/1/shared/fds/hi/...ilt/default.stm

Basically I was assuming that a 2 year maturity would give a rough idea of what the bond market thought was a reasonable return. I do not find it surprising that the short end has fallen in price/risen in yield a bit as the rate move seemed to have taken most by surprise. Oddly, the long end has fallen even more. I don't get it. I thought we had an inverted yeild curve because the bond market was expecting a recession/slow growth/low inflation. Surely an increase in rates would dampen the economy more, so why did the long end fall? Are they expecting more of an inflationary recession? Is it hedge funds/pension funds doing something weird? I dispare about markets, they always seem to go the opposite way to what I would expect.

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Basically deduct the value in the last column from 100. That they projected rate at that date, they is also the issue of bad debt, so to compare to the BoE rate you need to deduct 0.25base points.

I.e. red means rates up!

There is another website from a member here, but it's not updated as often: http://members.cox.net/dmrc/Projected_Rates.htm

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IMO its 1987 all over again but with an accelerated HPC. Last time the lag was a long 17 months or so. The graph bears some remarkable similarities.

The May correction began due to oil, conflict in the ME, IR hikes worldwide and, possibly, the BoJ tightening world credit. All of those factors are still with us and perhaps even worse. Wall Street will lead and recession will follow the housing market down.

Despite the recent rally I am still very light on stocks and cash heavy and do not intend changing anytime soon.

Nah, it much more like the late seventies...oil prices soaring>>inflation. :ph34r:

See this thread:http://www.housepricecrash.co.uk/forum/ind...c=33462&hl=

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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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