NFP Report to Create Volatility & Opportunity 22.10.13

After a very long volatile drought in the financial markets and in spite of the currently weak rates of the Yen and NZD, today – these circumstances are about to change. Due to the upcoming release of the NFP report markets’ volatility should considerably rise and many trading opportunities will line up for all investors.

Bank of England Minutes to be Released Tomorrow

Details from the most recent round of meetings by the board members of the Bank of England are set to be made public tomorrow 23 October 2013. The release of the information comes as the bank’s governor Mark Carney has announced that he has hired two private strategic consulting firms, McKinsey & Co and Deloitte LLP to take part in a review of the monetary institution over the course of the coming weeks. Analysts note that the move to bring in the outside consultants comes as the BoE marks a significant change in the level of its involvement in the field of market regulation.

Readers are reminded of the importance of the Bank of England’s minutes report as it can offer important insights into its governing body. Moreover, the steps taken to bringing in of the strategic analysts comes after Carney had stated his goal to revamp the strategic outlook of his organization in the previous month’s minutes report.

Analysts expect to look for positive comments coming from the report due to the significant progress that has been made in recent months in the UK’s economy. That said, it would seem as if there is a strong push for further changes, some of which may be hinted at in this report.

Additionally, investors should be wary of the potential for volatility in the market as some actors may decide to take actions based on information related to the report that could influence Sterling’s value in trading.

Canada’s Central Bank to Issue Rate Decision

The Bank of Canada is preparing to release its rate decision for the coming month in an announcement on Wednesday 23 October 2013.At this time, most experts believe that the rate will remain unchanged from what it has been during the previous number of months.

Analysts remind readers that the rate decision covers the overnight borrowing rates between banks and is influential on all borrowing rates, including those of short term loans and mortgages. As such, any changes to the rate can be considered to have a significant effect on the flow of cash between institutions and the general public, as well as for intra-industry bodies.

Analysts do not believe that the decision makers at the Bank of Canada have any designs at this time to make any significant adjustments to the interest rate, nor towards the monetary policy in general.

As such, it is unlikely that the release of the rate decision will serve to add any significant volatility to either the loonie in its trading or the market in general.

That said, as reported on below, the fact that crude is said to be trading lower than $100 in the WTI will likely mean a drop in revenue to Canada, whose major export is crude, meaning that the loonie may suffer until the market evens out.

WTI Prices Low Amidst Rise in US Stockpiles

It was reported on 22 October 2013 that the West Texas Intermediate had gone into its second day of lower than $100 per barrel on crude. This drop in prices brought the market down to prices that had not been seen in trading since July of this year.

Analysts point to a rise in the level of reported stockpiles in the US as the cause behind the fall in prices. While many experts have pointed to a ramping up in supplies at this time of year due to heating needs for the winter, they do expect some level of increased volatility in the market as prices are expected to remain below the $100 mark through to the end of the year.

It should be noted that along with the increased levels of supply, a mood of a relative reduction in tensions in the Middle East may help to keep oil prices low in the coming months. The fact that the US administration has stepped away from previous plans to attack conflict ridden Syria while the Iranian regime has also made overtures towards making concessions on their nuclear program, may bode well for a period of calm that could keep prices low.