mask BOE’s

02/ 02/ 2017

BOE’s "Super Thursday"

Daily Update - 02nd Feb 2017

Yesterdays Market

  • EUR Markit Manufacturing
  • USD ISM Manufacturing, ISM Prices, Feds Monetary Policy Statement & Fed Interest Rate Decision

Yesterday Explained

Of recent, both the Euro and Pound have begun to show positive growth action, and to be sure at least a portion of this is likely related to the recent performance of weak US Dollar. Yesterday afternoon better than expected Markit Manufacturing data from Euro Zone helped EUR to maintain its positive growth.

Better than expected ISM Manufacturing and ISM Prices data from USA failed to give any positive momentum to US Dollar as Dollar continued its’ weakness. FOMC voted unanimously to leave its policy rate within a target range of 0.50-0.75%. The outcome had been widely anticipated as the Fed just adopted rate hike of +25 basis points in December.

Only minor changes were seen in the accompanying statement. In short, policymakers retained the stance that future interest rate change decisions would be 'data dependent'. Feds mentioned that US Job gains remain solid and unemployment rate has stayed near its recent low. However Inflation remains slow and business investment is low which could be negative for US Dollar in the long run. Adding woes to the wounds US Ten Year Treasury yields also turned negative by 5 basis points, in return making rival currencies such as EUR, GBP & JPY to increase gains.

Today Market

  • GBP BoE Asset Purchase Facility, BoE Interest Rate Decision, BoE Minutes
  • GBP BoE Governor Carney Speech & Theresa may Speech on Brexit Timeline
  • EUR ECB President Draghi’s Speech
  • USD Initial Jobless Claims, Unit Labor Costs & Nonfarm Productivity

Today’s Focus

Todays is BOE’s super Thursday as all major reports that will come out are top tier reports from UK. The day commences with BOE asset purchase facility which is the value of money the BOE plans to create and inject into the economy through open market bond purchases.

Immediately after that, BOE’s Interest Rate Decision will be released which will focus on the loan interests that is provided to commercial bank. Next will be the BOE’s minutes followed by a speech by BOE Governor Carney.

UK Prime Minister Theresa May is expected to provide a speech at UK parliament on indicating timeline over Brexit Timelines. Later in the evening USA will release Initial Jobless Claims, Unit Labor Costs & Nonfarm Productivity reports ahead of USA Nonfarm Payrolls which is due to come out tomorrow. It would be interesting to see if positive reports can support the weak Dollar.