In his valedictory lecture last night, Bank of England Deputy Governor Charlie Bean dropped a hint at the possible fun and games to come over the next few months when he said he “did not expect central banks’ collective management of the exit from the present exceptionally stimulatory monetary stance will be easy”.
Judging by today, Threadneedle Street has a self-inflicted communication issue of its own to tackle after Mark Carney’s ultra-dovish inflation report press conference was followed up by a hawkish set of minutes, which mused that “gradual” may actually mean “earlier”.
Even qualified and caveated, this was guaranteed to cue more mayhem in currency markets, fanned by Easter-inflated retail sales figures. Its natural dealers trade the data as the time to move rates draws closer.
Bear in mind that the Bank also is concerned at the low levels of volatility in markets, considering threats such as a possible Chinese financial meltdown and the Ukrainian crisis, as it attempts to steer the exit from ultra-low rates. Things may be about to get a lot more lively.
