Ultima Markets: 【 Market Hot Spots 】 The tightening pace of the old clich é s GBP depreciation...

On Thursday, Beijing time, a group of members, including Bank of England Governor Bailey, received inquiries on monetary policy at the UK Finance Committee. The entire hearing revolved around a series of questions and answers regarding the future pace of monetary policy.Simply put, the Bank of England flexibly faces the future economic environment by adjusting its balance sheet, while also having little concern about current inflation。

The Bank of England's balance sheet increased to approximately1Trillion pounds, bought a total during the quantitative easing program8950Billion British treasury bond bonds. As early as this year2In August, the Bank of England began to passively implement quantitative tightening and stopped reinvesting the yield of its matured treasury bond. Since then, the scale of its treasury bond has decreased to8470Billion pounds.

(Bank of England's balance sheet is gradually shrinking, in millions)

At present, the pace of quantitative tightening by the Bank of England is reduced by approximately200£ billion, including maturing assets and unsold assets.The current way for the Bank of England to reduce its holdings is to sell treasury bond directly, rather than reinvest the due yield of treasury bond。

Meanwhile, yesterday, Bank of England Governor Bailey emphasized at a hearing that the Bank of England will not restore its balance sheet to2008At the level before the financial crisis in, quantitative tightening was only intended to provide room for maneuver in response to future events. But he also hinted that the balance sheet size would remain at hundreds of billions of pounds.

The red box represents the quantitative operations of the Bank of England after the subprime crisis, and the balance sheet size before the crisis was less than1000100 million pounds)

Bank of England Governor Bailey also emphasized that starting from4Starting from the month,There is ample reason to expect a sharp decline in inflation rates in the coming months.On the contrary, if there are signs that inflationary pressure will continue to rise, then further tightening of monetary policy is necessary.

Ultima MarketsInvestment Research Group AnalystElonBelieving that yesterday's hearing was still a clich é, without announcing more aggressive interest rate hikes or tightening policies, the tightening policies discussed by officials from the Bank of England have already been implemented5The month is digested by the market. This is from5It can be seen from the fact that the Bank of England still started to decline after raising interest rates in June.

(GBP USD daily chart)

From a technical perspective, on the daily cycle, the GBP/USD ratio5month10After the formation of a false breakthrough, the downward trend of the market clarified the top deviation of the momentum. Yesterday's bearish and swallowed nakedKThe pattern also indicates that the current market bears are very strong, and there is likely to be a significant downward trend for the pound to retreat in the future.

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