The sterling came off its highs and yields on UK debt fell on Thursday in response to the Bank of England and Mark Carney’s unconvincing attempts to warn traders that markets are behind the curve on interest rate hikes over the next few years.
Sterling held above 1.32 against the dollar early Thursday as traders eagerly await the Bank of England's policy meeting today. Bond yields declined from July highs but remained elevated, as some market participants believe that the BoE may surprise, with a 25-basis point rate hike.
The Bank of England has left interest rates unchanged with only two of its MPC members voting in favour of a hike this month. No other rate setter decided to join Michael Saunders and Ian McCafferty on this occasion, and this disappointed some market participants who were hoping that more would join them.
There is something good going on in the global economy and that is translating to higher demand and higher prices for oil. While short sighted and economically challenged people always think the lower price for energy the better, fail to grasp the realities of global trade and the real economics of production. With U.S. gas demand at a record and global demand on the rise, it reflects good economic times to come.