Forex Blog

December 9, 2011

Moody’s Cuts French Bank Credit Rating

Filed under: OANDA News — Tags: , , , , , , , — admin @ 7:00 am

Moody’s has downgraded the credit rating of three of France’s largest banks due to concerns that the banks have insufficient funds to cover their exposures to questionable sovereign debt. The banks have had difficulty securing short-term funding as larger investors have avoided buying French debt.

Moody’s cut its ratings on the long-term debt of BNP and Credit Agricole by one notch to Aa3, concluding reviews that began in June and were continued in September. Societe Generale’s long-term debt was cut by one notch to A1.

Source: Reuters

December 2, 2011

Week in FX: Europe Nov 27-Dec 2

Filed under: OANDA News — Tags: , , , , , , , , , , — admin @ 11:00 am

Markets have been trying to add risk as the hangover effect from central bank actions earlier in the week remains. However, it’s a rather tenuous relationship with next weeks Euro-event risk on everyone’s radar and Friday’s NFP labor participation rate been scrutinized. Germany’s Merkel says the EU is in a marathon, stating “the lessons are very simple: Rules must be adhered to, adherence must be monitored, non-adherence must have consequences. (Leaders have to) overcome fundamental flaws in the construction of the euro area.”   These fundamental flaws, if addressed and changed, will take years. Next week we get to see how serious Euro members are about been on the same ‘playing field’.  

Below are some other highlights of the week:


EUROPE

  • Last weekend press rumors were fast and furious: The free press was reporting positive EUR actions. Germany’s finance minister suggested that the Euro-zone could rapidly implement changes to the Lisbon Treaty, allowing for significantly greater EC fiscal oversight of Euro area member countries. In theory, this would create a “Stability Union” before a deeper treaty change in the future.
  • Italy: La Stampa, suggested that that the IMF would provide a €600b financing facility for Italy, however, this was denied, deemed not credible and that there are no discussions within the G7 of a large IMF package for Italy.
  • Germany: Die Welt reported that the German government and five other EZ members, with triple “A” credit ratings, are considering issuing bonds. Part of the money raised would be used to provide financial assistance, under strict conditions, for Italy and Spain.
  • The EFSF issued a new issuance strategy that would have it increase precautionary funding. All the reports stop well clear of promising immediate relief.
  • Moody’s: Warned that Euro area sovereign ratings are increasingly under threat. They noted that risk of multiple defaults by Euro area countries is “no longer negligible”.
  • EUR: EZ M3 growth slowed to +2.6%, y/y, in October from +3% in September, weaker than the +3.4% forecasted. The market expects that signs of monetary contraction suggest a strong need for further monetary stimulus from the ECB. FI traders are pricing in a -25bp ease next week, and expect policy members to scale up its SMP program to take rates below 1% in Q1 2012.
  • GBP: UK CBI reported sales falling below consensus to -19 this month from -11 in October. Expected sales in December also printed weaker at -6 from 4 in November. This would suggest further pressure on the cable.
  • CHF: SNB Vice-Chairman Jordan stated that policy makers are “prepared to take new measures should economic prospects and deflationary risks make this necessary.” He gave no signal about whether the EURCHF floor, currently at 1.20, might need to rise. The market sees a case for further monetary stimulus for the Swiss economy is growing.
  • EUR: European bond markets continues to send warning signs, with Italian 10-year yields again backing up ahead of Tuesday’s auction, and yields elsewhere in Europe unable to trade moderately lower.
  • EUR: Italy auctioned EUR7.5b of bonds, a tad shy of the maximum 8b on offer. The issues were reasonably covered but the clearing yields were high, above +7% for all tranches.
  • EUR: The cost of USD funding via EUR FX forwards continues to rise and is fast approaching the extremes seen in late 2008 despite the availability of Central bank dollar swap lines.
  • Moody’s: The rating agency announced that it is reviewing ratings on subordinated and junior debt from 87 European banks for possible downgrade. They expect two-notch downgrades to subordinated debt and a one-notch downgrade on other debt. Austria, France, Italy, and Spain have the most banks under review.
  • EC: Confidence surveys continue to show deterioration, with business confidence sliding to -7.3 from -6.5. The services confidence was worse than consensus at -1.7 after +0.1 last month.
  • UK: Foreign investors bought +£12.5b of gilts last month (the most in 18-months), and up from +£9b in September. This suggests that concerns about systemic risk in the EZ and lack of AAA reserve alternatives will limit outright flight from GBP. However, significant deterioration in the EZ growth would likely stall a UK recovery and prompt further easing from the BoE.
  • SEK: GDP grew +1.6%, q/q, in Q3, much stronger than the consensus forecast for a +0.4% rise.
  • EU finance ministers: Agreed on disbursement of the next tranche of aid to Greece and endorsed Italy’s latest fiscal measures. Nailed down the details of how to leverage the remaining EUR250b of the EFSF (program may raise between EUR500-750b, below the EUR1t originally touted). Is the IMF to support Italy? It has been suggested that the ECB council is shifting towards a more active role.
  • Most of the world’s major central banks (Fed, ECB, BoE, BoJ, BoC and SNB) agreed that they would take “coordinated actions to enhance their capacity to provide liquidity support to the global financial system.” Specifically the Banks have cut the price on existing temporary US dollar swap arrangements to USD OIS plus 50bp which is a cut of about 50bp from what is currently charged. It will apply this from December 5 to February 1 2013.
  • CBanks: Agreed to set up bilateral liquidity swap arrangements to cover any of their own currencies should that be needed.
  • GER: Unemployment rate edged lower to +6.9% from +7% as unemployment fell -20k vs. -5k. However, analysts expect further deterioration in the coming months given recent declines in leading indicators.
  • NOK: Norwegian retail sales also surprised on the upside, rising +0.7%, m/m, in October, reversing the September drop. The Norges bank also announced that it will not buy FX for the Global Pension Fund this month.
  • CHF: Swiss KOF leading indicator fell more than expected to 0.35 (lowest reading in two-years) and the current level is consistent with Swiss GDP growth close to zero.
  • CHF: The SNB published its balance sheet as of 31 October and showed no FX intervention being carried out during the month. The market now expects the SNB would need to see “deeper risk of recession and/or deflation before it considers changing its intervention policy or raising the floor”.
  • EUR: Comments from the German economics minister that the ECB “can do what it deems necessary” in a crisis and from ECB President Draghi that the next few days will be important for the euro area have helped support the news of a reduced rate on the Fed USD swap line. Draghi emphasized the limited nature of bond market interventions.
  • ESP: Spain successfully auctioned EUR3.75b. worth of bonds. They again had to pay up to persuade investors to buy their product. This will most likely be the pattern for 2012. However, stronger demand pushed Spanish yields to their lowest level in two-weeks and happened to drag the EUR to a session high.

  • EUR: November manufacturing PMIs fell deeper into contraction territory.The EZ and German manufacturing PMIs were left unrevised at 46.4 and 47.3 respectively. Spanish and Greek PMIs showed signs of stabilization at very weak levels. Italian PMI surprised to the upside, rising to 44 from 43.3.
  • CHF: Their manufacturing PMI fell to 44.8 (weakest print in two-years) and in line with the weaker than expected KoF indicator. This suggests a bleaker picture in the coming months.
  • UK: Their manufacturing PMI was a touch higher in November at 47.6 from 47.4 in October. However, employment fell to 46.2 from 48.6, suggesting likely further deterioration in the labor market condition.
  • EUR: Merkel reaffirms opposition to Euro bonds

November 18, 2011

Week in FX: Europe Nov. 13-18

Filed under: OANDA News, Uncategorized — Tags: , , , , , , , , , , , , — admin @ 12:57 pm

It was a week of spreads. The failure of the ECB to wholly stabilize Italian, Spanish and French yields, despite political developments in Italy, had the market applying risk aversion trading strategies slowly all week. Most EUR relief rallies provided the market better opportunities to either exit their riskier positions or instigate further negative bets. As the slow-motion risk meltdown continues it has allowed the dollar and the yen to trade broadly firmer. The Swiss, as a reserve currency, has been taken out of the equation because of the SNB revaluation actions.

The absence of an aggressive ECB bid has further boosted perceptions of systemic risk in the Euro area.The surprise to most has been how orderly and gradual the FX moves have occurred. Normally, with any risk aversions trading strategy decision, “Panic” seems to be the outlier as investors all run for the exits at the same time.

Below are some other highlights of the week:


EUROPE

  • The week started with the Italian parliament passing key growth measures, and Mario Monti been given a mandate to form a government. He will wear two hats, that of Prime Minister and Finance Minister.
  • Italy successfully auctioned EUR3b in 5-year bonds with a healthy bid to cover, but the size of the offering was well below typical auction size.
  • Euro area IP fell -2%, m/m, in September after a +1.4% rise in the previous month. This was a tad better than the market consensus for a -2.3% fall. The weak trend is likely ongoing.
  • On Tuesday, Italy’s 10-year yield pushed back through +7% before coming off following reports of ECB buying. French and Spanish bonds continued to underperform.
  • UK: September inflation printed a touch below expectations at +5%, y/y, down from +5.2% in August. The decline in food and transport prices helped. The core (ex-food and energy) accelerated to +3.4%, y/y and above the +3.2%, y/y forecast.
  • UK: Governor King’s ‘letter’ continues to emphasize downside risks to growth stemming from global uncertainties, with inflation more likely to undershoot the +2% target in the medium term.
  • EUR: Growth remains subdued at +0.2%, q/q, in Q3. Digging deeper, the German and French economies expanded at +0.5% and +0.4% respectively. Elsewhere was weaker. Including weaker PMI’s and confidence indicators, analysts note this indicates “a recession risk”.
  • EU: German ZEW survey printed below consensus at -55.2, the lowest level in three-years.
  • UK: BoE Inflation reported inflation at about +1.5% at the end of the forecast period, down from +1.9% in the August report.
  • EU: The Euro-bond market continues to send danger signals, with Spanish yields up sharply following its 10-year bond auction on Thursday, Italian 10-year yields again trade above +7%, and French 10-year yields managed to print new highs for the year.
  • EUR: Spain successfully auctioned EUR3.6b of 10-year bonds. Bid-to-cover on the auction was a “reasonable” +1.54 times. However, the amount sold was below the EUR4b on offer.
  • ECB again bought Spanish and Italian bonds, but ‘not in sufficient size to stabilize the market’.
  • German government comments continue to warn against viewing the ECB as a lender of last resort for European governments. Rhetoric provides another reason to pressurize the EUR.
  • UK: Retail sales rose +0.6%, m/m, well above consensus forecast for a -0.3% fall. Note that deteriorating labor market conditions does not support this trend. With the BoE inflation projection below 2% in the two year horizon based on the current size of QE, analysts now expect further QE extension next quarter.
  • SEK: Average house prices fell in September, dropping – 7.1%, y/y. This should support expectations for a rate cut by the Riksbank. Futures market pricing in a -50bp cut by Q1.

November 15, 2011

US Retails Sales Rise – Wholesale Prices Fall

Filed under: OANDA News — Tags: , , , , , , , , , , , , — admin @ 7:31 am

U.S. retail sales increased 0.5 percent, the Commerce Department said on Tuesday, after rising 1.1 percent in September. That was above economists’ expectations for a 0.3 percent rise. In a separate report, the Labor Department said its producer price index fell 0.3 percent last month after rising 0.8 percent in September. Economists had expected the PPI to fall only 0.1 percent.

The rise in retail sales provided some hope that growth in the economy was gaining some momentum. A drop in wholesale prices was seen as a sign that inflation concerns remains low.

Source: Reuters

Empire holds Steady

Filed under: OANDA News — Tags: , , , , , , , , , , , , , , — admin @ 6:42 am

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers held steady in November. After a string of five consecutive months of negative readings, the general business conditions index rose nine points, to 0.6. While the new orders index edged down to -2.1, indicating that orders were a little lower, the shipments index rose to 9.4, indicating an increase in shipments. The inventories index fell to -12.2—a sign that inventory levels dropped. The prices paid index continued to move downward, reaching 18.3, its lowest level in nearly two years; the decline suggested that the pace of input price increases slowed further in November. The prices received index rose slightly, to 6.1, evidence that selling prices continued to increase. Employment indexes were mixed: employment levels were slightly lower and the average workweek slightly longer. Future indexes surged, indicating a widespread expectation that conditions would improve in the months ahead, with the future general business conditions index rising to its highest level since May.

Federal Reserve of New York

November 13, 2011

Trading Week Outlook: Nov. 14 – Nov. 18

Filed under: Forex News — Tags: , , , , , , , , , , , , — admin @ 10:42 am

Nov. 12, 2011 (Allthingsforex.com) – In case the market decides to pay attention not only to headlines from Italy and Greece but also to economic data, the week ahead will offer plenty of insights on inflation and economic conditions in some of the world’s largest economies.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1.    JPY- Japan GDP- Gross Domestic Product, the main measure of economic activity and growth, Sun., Nov. 13, 6:50 pm, ET.

After registering its third recession in a decade and contracting by 0.9% q/q in Q1 and 0.5% q/q in Q2, the preliminary GDP estimate for the third quarter of 2011 is forecast to show the Japanese economy returning to growth by up to 1.5% q/q in Q3 2011. More upbeat GDP report and safe-haven flows should keep the yen supported in spite of the desire of the Japanese authorities to see their currency weaken.

2.    GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., Nov. 15, 4:30 am, ET.

The September spike in inflationary pressures to 5.2% y/y could be followed by a slight pullback to 5.1% y/y in October. Stubbornly high inflation, however, has not prevented the Bank of England from continuing its accommodative monetary policy and doing more quantitative easing.

3.    EUR- Euro-zone GDP- Gross Domestic Product, the main measure of economic activity and growth, Tues., Nov. 15, 5:00 am, ET.

More signs of deteriorating conditions in the Euro-zone’s economy might come from the third quarter GDP estimate with forecasts pointing to only 0.2% q/q growth- same as the 0.2% q/q reading in Q2 2011. The GDP report will be released at the same time as the German ZEW economic sentiment index which is also expected to be weak with the index dropping to -52.1 in October from -48.3 in October.

4.    USD- U.S. Retail Sales, an important gauge of consumer spending measuring the total receipts at retail establishments, Tues., Nov. 15, 8:30 am, ET.

A lot is riding on this report as consumer spending is a major part of the U.S. economy, but retail sales might not demonstrate a lot of strength with a smaller increase by 0.2% m/m in October from 1.1% in September. However, the slowdown could be temporary as sales at retail establishments would likely see a boost in the upcoming months due to the holiday shopping season.

5.    JPY- Bank of Japan Interest Rate Announcement, Wed., Nov. 16, around 12:00 am, ET.

With the U.S. dollar slowly but surely erasing a big chunk of its post-intervention gains against the yen, it would be interesting to find out if the Bank of Japan is ready to stand against the tide of persistent yen strength. This is provided that they haven’t intervened by the time the meeting takes place, as another intervention remains a likely event.

6.    GBP- U.K. Jobless Claims and Unemployment Rate, the main gauges of employment trends and labor market conditions, Wed., Nov. 16, 4:30 am, ET.

The U.K. employment data followed an hour later by the Bank of England inflation report could become a couple of back-to-back risk events for the pound. Forecasts point to an increase in the amount of jobless claims by up to 20,000 in October from 17,500 in September, while the unemployment rate inches higher to 8.2% from a previous reading of 8.1%.

7.    EUR- Euro-zone HICP- Harmonized Index of Consumer Prices, the main measure of inflation, Wed., Nov. 16, 5:00 am, ET.

The European Central Bank’s preferred inflation gauge is forecast to stay unchanged at 3.0% y/y in October- same as the 3.0% y/y reading in September, but month-over-month the index is expected to pull back with a smaller 0.3% m/m increase in October from 0.8% in the previous month. Shifting monetary policy from maintaining price stability to pro-growth on the threat of a double dip in the economy could spell further ECB rate cuts.

8.    GBP- Bank of England Inflation Report, the bank’s official assessment and outlook on inflation, Wed., Nov. 16, 5:30 am, ET.

As the latest PPI report showed inflationary pressures coming off their recent highs, if the Bank of England offers a dovish outlook on inflation, there will be no urgency for the bank to start tightening monetary policy anytime soon. Lower inflation expectations and risk aversion could lead to some unwinding of long GBP positions.

9.    USD- U.S. CPI- Consumer Price Index, the main measure of inflation, Wed., Nov. 16, 8:30 am, ET.

Consumer prices in the United States could remain a non-issue for the Fed with forecasts expecting a flat 0% m/m reading in October from 0.3% m/m in September. Only a significant drop in unemployment and consistent improvement in the U.S. job and housing markets could change the Fed’s mind and its promise to keep rates “exceptionally low”. Until then, QE3 would not be completely out of the picture.

10.    USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Thurs., Nov. 17, 8:30 am, ET.

Losing momentum after the jump to 658K in September, the U.S. housing starts are forecast to decline to 610K in October, while the building permits flatten in the 600K range.  

November 11, 2011

Week in FX: Europe Nov. 6-11

Filed under: OANDA News — Tags: , , , , , , , , , , , , , , — admin @ 12:31 pm

This is a big weekend in Rome, and with a partial US and Canadian holiday, it’s not surprising to see short covering taking place going into the weekend. However, this weeks trading headache may reappear as early as Monday if the ECB is missing in action. Its “critical” that the central bank give the perception of being aggressive, if not, then this week’s nightmare of market risk liquidation will again reoccur.

Italy represents the single biggest threat to the Euro currency union and this week, that threat loomed large. Bond yields rose to unsustainably high levels, suggesting that Italy would need to undertake some type of default. If that should occur, the regional headache will not be contained, there will be global repercussions. The market has a lot to digest over the next few days. Goldman’s is confident that the worst has passed and expect the EUR to retest 1.40 again.

Below are some of the highlights of the week:


EUROPE

  • Greek Prime Minister agrees to step aside to allow a national unity government to form. The unity government will approve measures relating to the EU rescue and then lead Greece to elections.
  • Greece passed the baton onto Italy, allowing them to become the more important source of concern.
  • ECB council member Mersch (in La Stampa) that the ECB could stop buying sovereign debt if a country wasn’t pursuing reforms, emphasizing the importance of passing legislation.
  • Market begins to focus on the “fundamental” problems in EU. Data remains problematic, with German IP weaker than expected. Production fell -2.7%, m/m in September, below the -0.9%mom expected. Capital goods production was weak, down -4.7%. This suggests that German activity has slowed significantly at the end of Q3. What about Q4?
  • Not helping the region EZ retail sales also disappointed with a -0.7%, m/m fall.
  • Norway manufacturing production rose +0.8%, m/m, compared to the +0.0% consensus. Trade ties with Germany and Sweden suggests that slowdown remains a risk. Norges Bank has postponed any rate hikes to next year.
  • CHF inflation dipped back into “deflationary territory” of -0.1%, y/y, while core declined to +0.5%. Price pressures have eased faster than the SNB projected last month.
  • CHF: Hildebrand stated that the SNB is “ready for more measures”.
  • GRD: Former ECB VP Papademos is elected new PM. He is expected to guide approval of the EU rescue plan through parliament, allowing the next aid tranche to be disbursed, and pave the way for elections.
  • UK IP was flat in September. Market consensus forecast was for a +0.1% rise. The growth was less than the Office for National Statistics forecasted, +0.4%. Heads up for further downward revisions to the Q3 GDP estimate. Coupled with a weak October PMI print suggests poor numbers for Q4.
  • UK: RICS house price balance at -24% indicates a soft market last month.
  • SNB Vice Chairman Jordan reiterated the central bank’s commitment to defend the current EURCHF floor at all cost. He expects the CHF to weaken over time.
  • Italian bond yields soared through +7% after margins raised on Wednesday. Today see yields aggressively correct lower, with the 10-year yield down another -23bp to +6.64%, about 82bp off their highs.
  • Prime Minister Berlusconi offered to resign after the passage of key legislation. This action should reduce risks of a political impasse that would delay approval of reforms promised to the EU.
  • UK trade deficit widened substantially in September to -£9.8b from -£8.6b. Exports grew only +0.2%, m/m while imports rose +3.8%.
  • UK: BRC shop price index dropped to +2.1%, y/y, from +2.7%.
  • SEK: Industrial production surprised strong rising +1.3%, m/m, in September, above consensus for a -0.5%, fall. However, industrial orders declined for a second consecutive month. Coupled with weaker PMI surveys in Sweden and Germany suggest a bleaker outlook.
  • SEK: Riksbank’s minutes of the October meeting were broadly in line with the dovish policy statement accompanying the rate decision.
  • UK: BoE leaves policy unchanged (+0.5%). However, analysts believe that weaker than expected IP, combined with a softer October PMI suggest there is a potential to increase QE next quarter.
  • Market are expecting the passing of Italian reform legislation this weekend and the ECB to return to the fold and increase bond purchases on Monday.
  • EUR: Italian Production fell sharply -4.8%, m/m, in September, worse than consensus of -3.0% and reversed last months gain +3.9%. French IP fell -1.7%, m/m. If we include Germany then the growth momentum in the core appears poor.
  • SEK: Inflation surprised soft. Headline inflation fell to +2.9%, y/y, in October, below consensus for an unchanged read. The core fell even more sharply to +1.1% from +1.5%. The reading allows the Riksbank to slash rates next month if need be.
  • NOK: Inflation printed in line with consensus, moderating slightly to +1.4%. Core inflation was unchanged at +1.2%, y/y.
  • SPN: GDP was flat in Q3 and in line with expectations.

November 4, 2011

U.S. Unemployment Drops to 6-Month Low of 9.0%

Filed under: OANDA News — Tags: , , , , , , , , , , , , , , — admin @ 7:01 am

Friday’s Non-Farm Payroll report rose by 80,000 in October but missed expectations for a gain of 95,000. August and September figures were revised upwards by 102,000 more jobs resulting in lowering the official unemployment rate from 9.1 percent to 9.0 percent.

The labor market remains a top concern as without significant improvement, overall economic recovery is impossible. 13.9 million workers remain unemployed but recent gains provide some hope that the jobs market is growing stronger.

October 19, 2011

EU Debt Plan Gives Lift to Stock Markets

Filed under: OANDA News — Tags: , , , , , , , , , , , , — admin @ 6:55 am

Stocks in Europe turned higher ahead of the New York open as Eurozone officials prepare to meet to continue work on a debt-relief plan for the region. The FTSEurofirst 300 .FTEU3 index of top European shares was up 1 percent at 972.11 points at 1118 GMT, rising toward the 50 percent retracement of its slump from late July to late September.

Investor sentiment was boosted by a report in Britain’s Guardian newspaper a deal had been reached by France and Germany to scale up the European Financial Stability Facility to more than 2 trillion euros, a story later denied by two senior European Union officials.

Source: Reuters

October 18, 2011

Bank of England Struggles With Slow Growth, Rising Inflation

Filed under: OANDA News — Tags: , , , , , , , , , , , , , , — admin @ 2:55 pm

The Bank of England and Governor Mervyn King face a desperate dilemma – allow the economy to continue its downward path, or attempt to boost growth through further quantitative easing. The catch of course is that with the promise of more “easy” money, comes a greater risk of pushing inflation – which is already a top-level concern – even higher.

For the month of September, inflation as measured by the Consumer Price index (CPI)surpassed all earlier projections jumping to a three-year high of 5.2 percent. Sharp increases in gas and electricity were mostly responsible for the hike but the cost of most household goods also rose as noted with a 5.6 percent hike in the Retail Price Index (RPI).

The Bank of England is tasked with implementing policy to maintain inflation as near as possible to 2 percent annual growth. If inflation deviates from this target by more than 1 percent in either direction, Governor King must send a letter to the Chancellor of the Exchequer to explain why the target was missed. The Governor has written many of these letters of late and will be writing yet another following September’s results.

For Britain’s beleaguered consumers, it must feel as though the walls are closing in. In addition to surging inflation, unemployment is at a 17-year high of 8.1 percent. It is hardly surprising then that consumer spending is down 0.9 percent year-over-year and this is particularly distressing as consumer spending accounts for two-thirds of Britain’s economic activity. Until consumer spending returns to more typical levels, recovery in the larger economy is out of the question.

In fact, officials are already preparing the public for another expected uptick in inflation in October as energy rates are scheduled to increase yet again. After this next round of price hikes, however, energy costs are expected to hold steady until later in the new year. For a population suffering through more than two years of elevated inflation, any promise that the rate of increase in the cost of living must be seen as a form of relief. A pause in inflation may also provide the Bank of England with a window of opportunity to engage in further quantitative easing.

Minutes from the September meeting of the Monetary Policy Committee indicate that the MPC members are lining up in favor of adding another £75 billion ($118.4 billion) to the £200 billion ($315.7) already committed to the easing program. This has increased speculation that the Bank will inject more money into the economy by expanding its program of purchasing gilts directly from financial institutions thereby making more money available for lending.

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