Bank of England Super Thursday approaches

5 August, 2015

Sterling will continue to be a focus today ahead of the Bank of England’s big day tomorrow where for the first time they will announce interest rates and release the minutes of their decision at the same time. On top of this the BOE will also release its Inflation Report which includes its most up to date forecasts for growth and inflation. This wealth of data could overwhelm investors and we are likely to see some volatility following the release, where the market is expecting the first votes for a hike from at least a couple of MPC members since the hawks were last calling for the base rate to rise last year. What has been made clear by both the Federal Reserve’s Janet Yellen and the BOE’s Mark Carney is that rates are going to move upwards soon. For the BOE the challenge is to determine whether, at a time of very low inflation, wage growth is robust enough to warrant the commencement of rises later this year or early next year, especially at a time when recent data has been indicating the economy is coming off the boil. This week alone has seen unimpressive PMI surveys for the UK and this morning sees the important services PMI release which is expected to dip from 58.5 to 58.0. Anything lower than 58.0 could put sterling under pressure.

For the US the debate is not indifferent with the Fed’s voting member Lockhart overnight calling for the start of rate hikes in September, but the market is expecting later in the year and we have two important nonfarm payrolls releases ahead of then, the first being on Friday. Today sees the ADP payroll expected to come in at 215k so anything better could see the dollar add to its overnight gains following the comments from Lockhart.


Source link  
Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...

Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...


Trump says Brexit should happen

President Donald Trump promised the U.K. a "phenomenal trade deal" Tuesday, on the second day of his state visit to Britain...

Euro and Gold instead of Dollar

Gold rose on Monday to the highest levels since February, reaching $1327 per ounce. In the first hours of the Tuesday trading session, there...

Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...


Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...

Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

  


Share it on:   or