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BoE could hike in Q4 2015 – Danske Bank

FXStreet (Edinburgh) - According to analysts at Danske Bank, the Bank of England could start its hiking cycle in the last quarter of 2015.

Key Quotes

“We have postponed our expectations for the first Bank Rate hike three months from August 2015 to November 2015”.

“The main reasons behind our new call are that we have pushed our call for the first Fed hike to September, the appreciation of the GBP in recent months and slower growth in Q1 15”.

“We still believe that Bank of England will hike this year despite low inflation, as inflation is expected to pick up when the effect of the drop in food and energy prices starts to fade”.

“We expect wage growth to pick up further this year in step with the decline in labour market slack. However, future wage growth remains a downside risk to our call”.

“Along with our call, we have revised our yield forecast down some 10 to 20bp across the GBP curve and our 1- to 6-month EUR/GBP forecast slightly higher”.

EUR/JPY drops below 127.00

The EUR/JPY pair extended losses to trade below 127.00 levels as the benchmark bond yield in Germany fell to record low for the second consecutive session.
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RBA rate cut still on the cards – Westpac

In the view of Strategist Sean Callow at Westpac, the likeliness of the RBA to cut rates in the May meeting has been reduced, albeit it is still feasible...
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