SHORT GBPUSD & FTSE RALLIES: GOV M.C SPEECH & BOE FSR HIGHLIGHTS1. *Id say a 6/10 dovish reaction by markets, GBP falling across the board & FTSE gaining. Carney seems contempt with a lower GBP and is happy to continue talking the currency lower in an attempt to use the exchange rate mechanism as a leading instrument to buoy UK economic stability (GDP, CPI, Unemp) against the potential Brexit backdrop; thus I continue my view of shorting GBP on pullbacks (my near term <1.30 is imminent, with August end 1.25xx in sight) and FTSE on rallies near 6600.
2. I continue to be surprised by the lack of coverage/ rhetoric from media in general and the BOE/ Govs regarding the UK Political situation regarding Brexit e.g. failure to sign the Article 50, PM Cameron Resignation in Oct, 70% chance Brexit happens in 2017 vs 2016.
Govenor Mark Carney Speech Highlights:
- BOE Carney: Have A Clear Plan, Putting It In Place, And It's Working
- BOE Carney: Will Take Whatever Action Needed to Support Stability
- BOE Carney: GBP Fall Was "Necessary" To Support Needed Economic Adjustments
- BOE Carney: Continues to See "A Material Slowing" in Economy Despite GBP Fall
- BOE Carney: Evidence Since Brexit Vote Consistent With Expectation of Slowdown
- BOE Carney: Want to Ensure No Question About Availability of Credit
- BOE Carney: UK Banks Have More Capital Than They Need
- BOE Carney: UK Banks Can Be "Part of the Solution, Not Part of the Problem"
- BOE Carney: "Extremely Important" That Policy Decisions Well Targeted
- BOE Carney: Negative Rates Have Potentially Counterproductive Consequences
- BOE Carney: Commercial Property Not A Big Issue for UK Banks
- BOE Carney: General Sense of Heightened Risk Aversion in Global Markets
- BOE Carney: Have Wide Range of Tools If Monetary Policy Easing Required
Financial Stability Report highlights:
- BOE Lowers Countercyclical Capital Buffer for UK Exposures to Zero from 0.5%
- BOE: Expects to Maintain CCB at Zero Until "At Least" June 2017
- BOE Move is First Easing of Policy Following Brexit Vote
- BOE: Decision Will Raise Banks' Lending Capacity by GBP150 Billion
- BOE: Decision Will Lower Regulatory Capital Buffers by GBP5.7 Billion
- BOE "Strongly Expects" Banks Will Continue to Support Real Economy
- BOE "Strongly Expects" Banks Will Continue to Support Real Economy
- BOE: Ready to Take "Any Further Actions" Needed to Support Financial Stability
- BOE: Stability of Funding Costs Should Reduce Pressure to Tighten Lending
- BOE Sees Risk of Decline in Capital Inflows Following Brexit Vote
- BOE: Persistent Fall in Inflows Would Put "Further Downward Pressure" on GBP
- BOE: Prolonged Period of Brexit Uncertainty Could Weaken Eurozone, Global Economies
