差價合約(CFD)是複雜的工具,由於槓桿作用,存在快速虧損的高風險。81.4% 的散戶投資者在與該提供商進行差價合約交易時賬戶虧損。 您應該考慮自己是否了解差價合約的原理,以及是否有承受資金損失的高風險的能力。

UKGBP

UK Plc. – Priced Like The US, Acting Like Europe

Michael Brown
Senior Research Strategist
2024年4月22日
The UK is in an interesting spot, with the BoE policy outlook priced in line with that of the FOMC, but the economic outlook looking much more like that of the eurozone. It seems unlikely that both can be right, culminating in further downside risks for the GBP.

The UK prompts something of a head-scratcher at the moment, which stems from the market’s, and the sell-side’s, view on how the UK economy is likely to evolve over the remainder of 2024.

From a monetary policy perspective, swaps price an outlook broadly in line with that priced for the FOMC – seeing just over two 25bp rate cuts from the ‘Old Lady’ this year, only marginally more dovish than the policy path priced across the Atlantic.

However, from an economic perspective, the outlook – according to both incoming economic data, and sell-side consensus expectations – appears much more akin to that of the eurozone, with growth set to remain relatively anaemic, and inflation set to fall towards the 2% target in much more rapid fashion.

Preview

This raises a few interesting points.

Firstly, at a basic level, is it the market, or is it economists, that are likely to be proven right?

  • At a glance, incoming evidence would argue that the economist community probably have this one spot on at the moment; inflation is rapidly on its way towards 2%, and should achieve said target in the spring by virtue of the feed-through of falling energy prices, while unemployment ticked up to a six-month high in the three months to February, as the labour market continues to gradually loosen.
  • In addition, typically hawkish BoE Deputy Governor Dave Ramsden noted last week that the balance of risks to the inflation outlook now “tilts to the downside”, while also being “more confident” that inflation persistence is easing. Given that, particularly internal, MPC members speak rarely compared to their peers at the Fed or ECB, these comments seem both deliberate, and significant, in laying the groundwork for a rate cut as soon as the June MPC meeting. Mention of policy remaining restrictive, even when rate cuts begin, in the March MPC minutes, serves to further reinforce this view.
  • Were a cut to be delivered in June, it seems likely that the MPC would want to proceed beyond that point at a relatively cautious pace. Quarterly cuts seems a logical pace, albeit this would mean delivering said cuts at meetings following the release of a Monetary Policy Report, rather than in conjunction with each forecast round, as we are likely to see with the ECB. In any case, quarterly cuts from June would take us to 75bp of cuts to Bank Rate by year-end.

But, how could the market be right?

  • Thankfully, the MPC have been relatively clear in explaining the factors that they are watching when determining policy shifts, namely – “indications of inflationary persistence”, tightness in the labour market, wage growth, and services price inflation
  • It doesn’t, then, take a PhD to deduce that stubborn services prices (above the MPC’s most recent forecasts), elevated earnings growth and/or a renewed labour market tightening, may well delay rate cuts. Hard data, however, is not currently moving in this direction, while leading indicators show relatively little risk of it doing so.
  • Alternatively, perhaps the market could be right if one views the UK economy through a different lens – one where potential growth is substantially lower than in the US, as the labour force increasingly shrinks, but one where inflation is structurally higher than in other DMs, not helped by the longer-term trend of GBP weakness importing further price pressures. Naturally, folk would rush to scream ‘stagflation’ in such a scenario, which is far from the base case.

What if neither the market, nor economists, are correct?

  • This would likely only be the case were some sort of financial, or geopolitical, accident to occur. In the former situation, cuts would likely be much deeper, and much quicker, than currently priced – with central banks, including the BoE, having this option in their ‘back pocket’ were it to be required, with inflation, essentially, back to target.
  • Geopolitical flare-ups would likely be much more difficult to contend with, though policymakers have, and likely would again, look through the temporary inflationary impacts of any potential surge in oil prices.

Lastly, what does this all mean for the GBP?

  • In the base case, markets are priced too hawkishly compared to what the MPC are likely to deliver, with the GBP OIS curve seeing just a 60% chance of a June cut, and pricing just a one-in-three chance of 3x 25bp cuts this year.
  • A dovish repricing would, naturally, apply further downward pressure to the GBP, particularly as Fed policy risks tilt increasingly hawkish at the same time.
這裡提供的資料並未根據旨在促進投資研究獨立性的法律要求進行準備,因此被視為市場營銷溝通。儘管它不受任何在投資研究傳播之前交易的禁制,我們不會在向客戶提供資料之前尋求任何優勢。

Pepperstone不代表這裡提供的材料是準確、及時或完整的,因此不應依賴於此。這些資訊,無論來自第三方與否,不應被視為建議;或者買賣的提議;或者購買或出售任何證券、金融產品或工具的招攬;或參與任何特定的交易策略。它不考慮讀者的財務狀況或投資目標。我們建議閱讀此內容的讀者尋求自己的建議。未經Pepperstone的批准,不允許複製或重新分發此信息。