Article / 04 August 2016 at 8:20 GMT

From the Floor: Awaiting the British rate decision

Your Next Trade


By Clemens Bomsdorf

While the aftermath of the Bank of Japan decision (read more in yesterday's European mid-session report here) can still be felt with an ”explosion of USDJPY volatility” as Dan Larsen from Saxo's FX Options desk in Copenhagen puts it, it is the Bank of England that will be in focus today. A 25 basis point cut to 0.25% is expected. 

”The focus will be on the outlook and how dovish they will be regarding next steps,” says Saxo Bank's Asia macro strategist Kay Van-Petersen. While there is no formal asset purchase expectation, numbers whispered are 50 to 75 billion GBP, says Van-Petersen. What is innteresting is that Goldman Sachs sees potential for a cut larger than 25 bps and additional asset purchase of 100bn GBP or even more.

The Bank of England’s announcement will also affect equities. “Equity futures are green, but we will see what will happen after the Bank of England announcement,” says Peter Garnry, Saxo's head of equity strategy. Generally he is negative when it comes to UK shares, but does not expect a large impact from today’s Bank of England decision.

Brent crude over the last year (click to enlarge):
Create your own charts with Saxo Trader click here to learn more
Source: Saxo Bank

The Asian session saw shares up, pushed by Brent crude breaking higher than $43/b. German electronic giant Siemens is up 2% pre-market as it published earning numbers beating expectations. For Garnry, the share is still a buy. 

In the US, several earning reports are due today. Monster Beverage, which Garnry recommends being long in, is very interesting as one of the fastest growing companies in the soft drink market and a possible takeover target. Also, EOG Resources could surprise to the upside just as other shale oil producers have done. 

Gold spot price since 2012:

Source: Saxo Bank.

From oil to gold... the precious metal has traded a couple of times above 1360 $/oz, but failed to really break the $1,360-80/oz level. Larsen sees $1,310-20/oz as the current support level. “In the options’ market we can see the market is bidding for longer term gold calls,” says Larsen. 

There are several levels that needed to break and then $1,500/oz could be targeted. “And then," according to Larsen, "we have decided from there on if we can continue higher."

 Siemens became a household name for its domestic appliances, but the German giant offers so much more, and does it well (as earnings prove!). Photo: iStock

Clemens Bomsdorf is consulting editor at

Editor’s note: From the Floor takes advantage of's unique real-time access to Saxo Bank’s various trading desks around the globe to put our community in touch with the developments that matter to their portfolios 


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail