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Rates change 5 Feb

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Super Contributor
Well TC if your that convinced are you gonna short banks then? So you are saying yes the consensus is 50 pts but the idiots are trading 100pts. I thought consensus meant "the majority agree". What you are saying is yes the majority agree on 50pts but the "other" majority are trading 100 pts .. a little confused.
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Super Contributor
I thought 'consensus' is what economists predict and that the market prices it's own expectation separate from consensus? Hence 50 and 100bps opinions. Oh, and on the CPI... is it really so much lower? We're like the Yanks now, we fudge and smooth inflation even better now with the 'new method'. I don't think Tito is convinced and will stick to his 50bps mantra
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Super Contributor
Re-read the post, im saying the consensus has changed to 100bp
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Super Contributor
ok got it ... maybe somewhere between 50 an 100
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Super Contributor
This is Dec inflation still old basket and excludes Jan fuel cut. Jan inflation will almost be at 6% which is the top end of the bracket. FRA curve priced in 100pts.
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Valued Contributor
the new method is effective Jan 09, todays cpi was for dec 08, so still old method ..
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Valued Contributor
fra has been wrong every mpc meeting for the last 4 years .. so if fra says 100, then 100 it is not ..
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Super Contributor
lol never said it was right - but you can take advantage of it. The FRA info comes from a general consesus as well?
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Highlighted
Super Contributor
I wouldn't be surprised if what analysts are saying is out of kilter with how their companies are investing their money. Also, a few local analysts and economists won't affect international companies. From today's "Bank Account", Credit Suisse: "we are still concerned about earnings downgrades given that we are between 5-10% below consensus on average for the next two forecast years and (2) we believe that the market is being too optimistic on interest rate cuts, with the bond market pricing in c400bps more cuts, against our forecast of 200-250bps" So trading differently to the supposed consensus. In the end, the only real consensus is the price, no?
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Super Contributor
Focus must be on stability so I recon a 50 Bps cut. I'm more interested in what rate they're going to stop at.
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Valued Contributor
fra really just a smallish pool of traders ??
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Super Contributor
Tito has stated in the past that the MPC will move rates by 50bps at a time....BUT, at its December meeting, two of the MPC's seven members argued for a full percentage point rate cut. My money's on 50bps.
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Not applicable
I myself am starting to feel optimistic and I am watching my detailed watchlist daily and may starting buying again, confidence is returning slowly but surely.
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