• ECB policymakers worried that market stress may hinder monetary policy
• Want new instrument to be ready for July meeting
• Likely to offset bond-buying with the new instrument

The report by Bloomberg adds that the tool would probably involve „selling other securities“ so purchases do not clash with their efforts to tighten policy. Essentially, this is QE but not exactly QE in some form of convoluted way.

However, just be wary that even if the ECB ‚wants‘ the new instrument to be ready in the next few weeks, it doesn’t mean that it will happen. I would expect policymakers to go through a series of alternatives and then iron out the nooks and crannies before finalising anything. And summer time in Europe could make it harder to manage timelines.

EUR

This article was written by Justin Low at www.forexlive.com.

That has seen cable fall to a low of 1.2050 after having earlier risen in the run up to the decision as it seemed that traders were getting a tiny bit excited that the BOE may perhaps be more aggressive.

The push higher earlier stalled around the 100-hour moving average and sellers were quick to send cable back down in the aftermath of the BOE decision, with price falling from 1.2150 to 1.2050 levels at the moment.

The BOE remains in a rather unenviable spot so you can’t really blame them for going with just a 25 bps rate hike. A 50 bps rate hike on paper may look like they are being more serious to combat inflation but at this point with inflation nearing double-digits, it hardly matters. Instead, it would just invite more recession risks as mentioned earlier here.

The latest policy step by the BOE does little to change the overall outlook that markets are still likely to be less certain about the central bank’s appetite to keep hiking as the economy starts to run into the ground. The UK remains the lead runner in the recession race and that factor alone is enough to keep pressure on the quid in the bigger picture of things.

This article was written by Justin Low at www.forexlive.com.

• Prior 1.00%
• Bank rate vote 9-0* vs 9-0 expected (*Haskel, Mann, Saunders voted for a 50 bps rate hike instead)

• CPI inflation is expected to be over 9% during the next few months
• CPI inflation to rise to slightly above 11% in October
• BOE will take the actions necessary to return inflation to the 2% target sustainably in the medium-term
• The scale, pace and timing of any further rate hikes will reflect the assessment of the economic outlook and inflationary pressures
• BOE will be particularly alert to indications of more persistent inflationary pressures
• BOE will act forcefully in response, if necessary
• Full statement

The pound has fallen on the decision with cable slipping from 1.2150 to 1.2060 as the BOE delivered a rather straightforward decision. As mentioned earlier here, the risks either way are likely to point towards the downside for the pound.

The central bank is sticking with a more gradual approach in line with economic considerations but it won’t do much to alleviate the narrative that inflation is set to hit double-digits in the UK and that the cost-of-living crisis is set to worsen in the months ahead.

This article was written by Justin Low at www.forexlive.com.

The consensus is for the BOE to hike rates by 25 bps today, given considerations to recent economic headwinds. However, after the more aggressive Fed yesterday and SNB surprise earlier today, I reckon it is inviting some bets for a bigger rate increase by the BOE later.

Cable fell to a low of 1.2058 earlier in the session but has picked itself up to 1.2165 currently and running into a test of the 100-hour moving average (red line) at 1.2163. There is also still near-term resistance closer to 1.2200 to limit gains for the time being.

As much as a surprise 50 bps rate hike by the BOE may see a knee-jerk reaction higher in the pound, I would say the play is to fade that as ultimately such a move would just invite sooner recession risks for the UK. More on that here.

This article was written by Justin Low at www.forexlive.com.

• Prior -6.5%
• Market index 307.4 vs 288.4 prior
• Purchase index 225.0 vs 208.2 prior
• Refinancing index 735.5 vs 709.5 prior
• 30-year mortgage rate 5.65% vs 5.40% prior

Despite a jump in the average mortgage rate to its highest since 2008, more homebuyers were in the market in the past week with both purchases and refinancing activity ticking higher. I reckon that could be a rush before the Fed tightens policy further this week. In any case, purchase applications are down more than 15% from last year so that tells the story better.

This article was written by Justin Low at www.forexlive.com.

Here’s a snapshot at Treasury yields on the day:

• 2-year yields down 13.9 bps to 3.295%
• 5-year yields down 12.9 bps to 3.468%
• 10-year yields down 10.8 bps to 3.375%
• 30-year yields down 5.9 bps to 3.373%

That’s a bit of a climb down as bond sellers book profit ahead of the Fed later in the day. There isn’t much else to comment on the action today as it all comes down to what Powell & co. has to offer later.

The dollar is also taking some off the top after its surging run in the past few days. From a technical perspective, there is little to note despite some of the moves being rather modest. GBP/USD is up 0.9% to 1.2100 while AUD/USD is up 1.0% to 0.6940 on the day but the former remains on edge amid a test of 1.2000 yesterday while the latter is still keeping below 0.7000, so sellers are still more favoured for now.

This article was written by Justin Low at www.forexlive.com.

It’s very much the same old stuff from Kishida. The BOJ has bigger concerns at the moment as 10-year JGB yields are straying offside from their implicit cap of 0.25%:

The yen may be getting a bit of a reprieve on the day as the dollar shakes off some of its gains and Treasury yields are on the retreat ahead of the Fed. However, if the BOJ continues to throw the kitchen sink in order to maintain yield curve control, it is tough to see yen gains qualify as anything but temporary.

This article was written by Justin Low at www.forexlive.com.

First-time homebuyers
may feel overwhelmed by pretty high home prices and the highly competitive real
estate market. Still, that is enough reason to give up immediately on your
search for a decent house.

 

There are several
things that you can do differently to acquire your new home. With patience,
determination, and wit, you may be able to bring yourself to the closing table.

To further help you
out, here are four pieces of advice that can aid you in your pursuit of buying
a new house. 

 

Make the Smart Choice

 

Timing is vital in the
housing market, and finding the right real estate agent can help you avoid
missing out on possible home options when they appear.

 

In looking for the
right agent, you would need someone, who is well-informed about the area, has
been in the business for quite some time, and is an expert negotiator. They
should also be taking note of your search to help you find more potential
homes.

 

Working with a real
estate agent who is already familiar with the area can be helpful as they could
have connections with other agents, which may allow you to know about a house
before it even comes up on the multiple listing service (MLS). As mentioned
above, timing is vital in the housing market.

 

Don’t Settle for
Something You Don’t Want

 

While changing your
main home requirements that can be achieved within your budget is tempting, you
need to be patient.

 

Your search may show
the same homes you already looked at, but that is not enough reason to start
thinking about whether you’re okay with having that extra bathroom or pool.

 

When you settle for
features that you don’t need or want for your house, your stay in that new
place could be short-lived, and you may end up selling the property again.

 

Stick to the Path

 

After making your
latest offer, the fear of missing out (FOMO) can quickly get you. However,
overbidding so that you can acquire the house you want could cost you
significantly in the long run.

 

If you paid more than
what you can afford, you may find yourself unable to enjoy some downtime in
your new home as much as you would like due to a lack of sufficient money.

Therefore, it’s
important to stick with your price. That way, you can fully savor the good
things that could happen in your new home. It would also help to check houses
under your actual budget, so you have the opportunity to pay above the asking
price without risking too much of your finances.

 

Make an Offer with an
Impact

 

This is not all about
your offer price. For example, the seller may need to close the deal
immediately or had other offers fail. Perhaps including conventional financing
or a no contingencies clause that could help close the deal quickly would give
the seller some encouragement.

 

Establishing a genuine
connection with your seller may also help. For instance, you can provide them
with a personal note with your family picture attached to it.

 

That would let them
know that you’re not buying the house just to demolish it, or you’re just
someone who is looking to move
closer to their parents or relatives.

This article was written by ForexLive at www.forexlive.com.

You can find
short-video content for just about anything on TikTok. In fact, this app has
become a popular place for individuals to learn
about personal finance and investing.

However, not all financial
or money management advice on TikTok can be considered helpful or good.

 

The issue is that more
nuanced information starts to become risky. And for beginners, it can be
difficult to separate topics appropriate to them from the ones they are not ready
to tackle just yet.

 

So when looking for
relevant, good financial advice on TikTok, here are three things you need to
remember:          

 

Context is Important

 

Context matters, and
the same can be said for helping people understand the differences between
financial products. 

 

Many personal finance
content on TikTok can be self-centered advice that lacks the context that many
financial experts use to help their clients grasp strategies and products and
how those can aid their situation and affect them in the long run.

So before you take
someone’s 60-second TikTok video on the best investment or retirement plan,
check their background first. See whether that person has another website that
would provide more information about them or the proper credentials to support
their story.

 

If they posted the
advice because it worked for them, instead of treating it as something that
would also work for you and everyone else, treat it as a basis for your own
research on the topic.

 

The Creator’s
Experience Matters

 

It can be challenging
to identify which creators on TikTok are real financial professionals and which
ones are amateurs. Furthermore, it turns out that several of the popular
personal finance influencers on the short-video platform lack the proper
credentials.

While there is no
condition to be officially authorized to provide personal financial advice,
individuals are typically required by financial regulators and governing bodies
to complete certification courses and have them renewed regularly.

 

The certificate would
prove that their financial expertise is reliable and up to standards.

Getting financial
advice from people who don’t have any real credentials is risky. Still, it does
suggest that you should consider it carefully and check whether the information
is accurate before making any decisions.

 

Watch Out for Day
Traders

 

There are many day
traders on TikTok, and you should try to avoid them as much as possible.

 

Day traders who provide
stock picks out on the short-video platform don’t always know whether their
advice would benefit the viewers absorbing the information. Note that giving
someone an idea and urging him to take action is entirely different from just
talking about an idea.

 

A well-thought-out investing strategy should
suit an investor’s risk tolerance. However, a content creator on TikTok would
not really know the risk tolerance of every single one of his viewers.

 

With one billion
monthly active users worldwide, the odds of personalizing investing content for
each TikTok user are pretty low.

 

Moreover, users of the
app should consider the type of stocks being endorsed. For example, if it’s a
penny stock that doesn’t have a lot of trading volume, that may be a red flag
for a pump and dump scheme.

This article was written by ForexLive at www.forexlive.com.

Headlines:

• ICYMI: The market now expects the Fed to hike by 75 bps tomorrow
• The post-ECB fallout in European bond spreads continues
• SNB to keep policy unchanged this week, to only hike rates in September – Reuters poll
• ECB’s Knot: A real possibility that rate hikes will continue in October and December
• RBA’s Lowe: Australians need to be prepared for higher interest rates
• UK May claimant count change -19.7k vs -49.4k expected
• Germany May wholesale price index +1.0% vs +2.1% m/m prior
• Germany May final CPI +7.9% vs +7.9% y/y prelim 
• Germany June ZEW survey current conditions -27.6 vs -31.0 expected

Markets:

• CHF leads, AUD lags on the day
• European equities lower; S&P 500 futures up 0.2%
• US 10-year yields down 5.3 bps to 3.316%
• Gold up 0.2% to $1,822.32
• WTI crude up 0.7% to $121.83
• Bitcoin down 5.9% to $21,845

The rout in markets took a bit of a breather in European morning trade today but there are still some nervous undertones persisting, as equities turned lower and the dollar regaining its footing after a softer start.

The bloodbath yesterday looked to calm down at first with US futures pushing gains of over 1% and European indices also opening higher across the board. But fast forward a few hours later and the mood has flipped around as European stocks are sitting in the red while US futures have nearly pared all of its advance from earlier.

The only relief is seen in long-end Treasuries, as yields settle lower for the time being. That said, there is still a bit of a push and pull and it is tough to draw much conclusions before US traders come in later in the day.

The dollar was initially softer to start the session but gradually reestablished its authority for the most part as risk appetite gets sapped.

EUR/USD moved up to 1.0485 before falling back to settle around 1.0430-40 levels, with USD/CHF having earlier dipped by 1% to 0.9875 as the franc gained with traders trying to figure out the SNB’s intentions later this week. The latter pair has recovered some ground back to 0.9935 currently.

Meanwhile, there wasn’t much reprieve for cable as it slumped to 1.2065 from 1.2200 at the start of European morning trade. Sellers continue to eye the 1.2000 level and it looks to be a matter of time before we get there.

Elsewhere, AUD/USD also tumbled from 0.6970 to 0.6885 as the dollar steadied and risk sentiment waned during the session.

As things stand, the market now expects the Fed to hike by 75 bps tomorrow. That is something that policymakers haven’t really given a clear message on but they are likely to still deliver on that regardless (considering the Fed’s recent history with being bullied). The kicking and screaming may not be over and done with if market players are vindicated for their moves this week.

This article was written by Justin Low at www.forexlive.com.