Show less
Morning Call: Softer dollar boosts commodities, stocks
21 September 2018 at 7:40 GMT
Morning Call: Markets stabilise as trade tensions ease
20 September 2018 at 8:28 GMT
Morning Call: Chinese shares surge as trade war rages on
19 September 2018 at 8:36 GMT
Today’s FX chart analysis - video
John J Hardy
18 September 2018 at 10:28 GMT
Morning Call: Trump hits China with tariff plan
18 September 2018 at 7:29 GMT
The week ahead in macro
Kay Van-Petersen
17 September 2018 at 8:11 GMT
Macro Monday week 38: Keep Global Macro and Carry On
Kay Van-Petersen
17 September 2018 at 8:02 GMT
Morning Call: US yield curve lifts, boosting dollar
17 September 2018 at 7:23 GMT
Technical analysis webinar – A view of the market: Larsson
Kim Cramer Larsson
12 September 2018 at 14:44 GMT
Morning Call: Chinese shares fall further
11 September 2018 at 8:36 GMT
Morning Call: USD, SEK in focus
10 September 2018 at 7:49 GMT
The week ahead in macro
Kay Van-Petersen
10 September 2018 at 7:37 GMT
Morning Call: Is Japan next?
07 September 2018 at 7:35 GMT
Video / 04 August 2017 at 7:45 GMT

From the Floor: Bonds rally on dovish BoE — #SaxoStrats

  • •  Bonds rally overnight on dovishness from Bank of England
  • •  BoE concerned about Brexit implications for UK economy: Hardy
  • •  EURGBP climbs to highest closing level since 2011
  • •  US nonfarm payrolls due at 1230 GMT; potential for more USD downside

SaxoStrats banner
By John Acher

Bonds rallied broadly overnight on the back of a dovish message from the Bank of England, which held rates steady on Thursday and expressed concern about the ramifications of Brexit for the UK economy.

Friday's scheduled highlight is the US Labor Department's employment report for July, including nonfarm payrolls, the unemployment rate and average hourly earnings.

"Very, very dovish Bank of England, clearly concerned about the implications of Brexit on the economy,” says Saxo Bank's FX strategy chief John J Hardy. "It is all about Brexit."

"The main thing to note was a very broad-based rally in bonds overnight, of course led by the UK after the Bank of England lowered both its growth and inflation forecasts," says Saxo Bank senior sales trader Christoffer Moltke-Leth. 

BoE governor Mark Carney was also cautious about the outlook for UK economic growth, and that is eliminating any fears of policy tightening in the near future, says Moltke-Leth.

As the pound weakened, EURGBP had its highest weekly close since 2011 at 0.9005 after the BoE's dovish remarks, says Hardy.

 EURGBP climbs as sterling drops
 Source: Saxo Bank

Softer-than-expected US ISM non-manufacturing figures on Thursday knocked US yields, with the 10-year treasury yield falling 5 basis points.

Further political noise emerged from Washington when it was reported that special counsel Robert Mueller will impanel a grand journey in his investigation of Russian interference in the 2016 US presidential election. "And this also seems to weigh a bit on sentiment there," says Moltke-Leth.

Markets expect a 180,000-job increase in July nonfarm payrolls, due at 1230 GMT, and the hourly average earnings component will be especially closely watched.

"If they are in line with expectations, [there will be] no net effect, and if they are worse than expected, that is the bigger risk, especially a disappointment on the average hourly earnings," says Hardy.

"So further downside risk for the USD," Hardy says.

Bank of England
 The Bank of England seems plenty worried 
about Brexit. Photo: Shutterstock

John Acher  is a consulting editor at TradingFloor

Market Predator Market Predator
As the pound weakened, EURGBP had its highest weekly close since 2011 at 0.9005 after the BoE's dovish remarks, says Hardy. "?" The same info in headline (bold letters). Check October-November 2016
John G Acher John G Acher
Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 4.3 percent, the U.S. Bureau of Labor Statistics reported. Aerage hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.36. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent, the bureau said.


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