Market reactions to central banks telling us plenty

Whilst the headlines from the Carney speech were very hawkish, the substance wasn’t quite so, yet the market reaction to this speech and yesterday’s RBNZ decision tells us a lot about the market’s thinking.

Yield is King. Nobody wants to be short the NZD when they are raising rates and the market will want to be very long of GBP if/when they start raising rates. Store this in your memory banks for the next few months.