Another exercise in kicking the can completed
I expected Carney to get more of a grilling about inflation but the UK press decided otherwise. This wasn't a dovish conference but it was one that lacked anything remotely hawkish. Perhaps the most dovish thing he said was about loosening policy if spending growth slows more abruptly than expected but even that was followed swiftly by him saying rates could also rise faster if wage growth picks up sharply.
I get the sense that the market perhaps got a little ahead of itself in its expectations for this one, and thus we see the pound where it is.
GBPUSD 15m chart
We've had a swift bounce from the lows now he's finished and naturally we're finding resistance support used to be. Now we'll see whether the dippers decide to fill up with more longs and keep the move of the last couple of days going. No doubt that might be hard work again and the first real test will be getting back above 1.2600. 1.2530 marks a bottom for now.
Has anything really changed? Not really. The BOE is looking through inflation for the foreseeable future, the same as the ECB. What could go wrong? ;-)
