That BoE audio feed

Well, now I’m not so sure. Because the reporting of how much money was being made etc:

On the foreign exchange blog, Forex Flow, a glowing endorsement of a trading news service claimed it had “direct access” to the bank’s press conferences that ran “five to eight seconds faster than any news service or video feed, which in this industry and trading, is a lifetime”.

The foreign exchange trader added that the founder Harry Daniels “and his team have not only made me (and others in our room) plenty of pips [percentage points] by being the fastest to a headline, they’ve saved me plenty of pips too in helping me being able to react to something that’s negative for a position I may have been in. That’s cost me a fair few lunches with Harry but that has been a grateful price to pay.”

That’s an advertisement for the system. Not an analysis of it.

Seriously, it’s like evaluating washing powders by believing the TV ads.

8 thoughts on “That BoE audio feed”

  1. Um, be a bit careful about “percentage points” in the quote above, as basis points are 1/100 of a percentage point, 0.01, in fixed income, and a pip in FX is 1/10,000, 0.0001, or 1/100 of a bp.

  2. Clearly they’re front running Forex positions, probably on a spread betting platform. And yes, it can make you/save you a lot of money if you know which way the market is going to go ahead of everyone else. Not sure if it falls under insider trading laws though..

  3. Fairly sure that it would, given past examples; inside information is the sort that moves prices once known. Central bank decisions are clearly that type, and there are established mechanisms for handling the distribution of that information – RNS. Looks bang to rights, guv’nor.

  4. Ducky McDuckface said:
    “inside information is the sort that moves prices once known”

    Ah, but this is something announced at a press conference, so at the time these people get the information it is known. I’d have thought that at the time of a public announcement, it’s in the public domain. Just not known by everyone because the broadcast hasn’t quite reached them yet.

  5. I don’t know how long this has been going on, but has there been much actual content in BoE statements in recent years – other than “bank rate stays at zero” to the surprise of nobody at all?

  6. Sounds like a recipe for disaster to me. With any market, a lot can be discounted in the current price. So you can get the “up on anticipation, down on realisation” (or the converse) effect as people close positions. Trying to work out what the effect of some piece of information might have on a market & whether this is already discounted in the price? In a few seconds from a standing start? Easy to fumble that one & find yourself going the wrong way.

  7. @TW

    Britain hosts the largest foreign exchange markets in the world, with daily average turnover of $2.8trillion.

    Even 0.1 second of advance information could potentially yield huge profits: 0.001% extra profit on a £50 billion trade is a nice little earner

  8. As previously noted, this has been going on since the beginning of this year, during which time the BoE has done, and been expected to do, nothing. Sterling meanwhile has moved rapidly on occasion in response to Brexit speculation – on which the BoE was worse than useless.

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