Previous Day's Market Highlights
Rates continued to hold in familiar ranges yesterday. The UK’s Manufacturing PMI fell more than forecast to 54.0 from 54.3 but had a limited impact on the pound. US ADP Employment Change surprised to the upside, increasing expectations for Friday’s NonFarm Payrolls release. The US ISM Manufacturing PMI disappointed, dropping from 60.2 to 58.1.
As expected, the Fed kept interest rates on hold. The dollar had a muted immediate reaction to the decision but was firmer overnight, benefiting from the Fed’s upgrade of its view on growth to “strong” from “solid”. The Fed remains on track to hike interest rates again in September.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
All eyes are on the Bank of England, which is widely expected to announce a 25-basis point hike to 0.75%--with the move priced in by up to 90%. As this move is largely expected and future hikes are expected to be limited and gradual, the additional upside for the pound may be relatively limited, although there could be an initial move higher. On the other hand, should the Bank surprise markets by holding steady, the pound could weaken more sharply.
It is a Super Thursday, with the release of the policy statement, meeting minutes, and quarterly Inflation Report. Additional volatility and guidance could be seen during the Inflation Report press conference (12:30) as investors interpret the decision and Governor Carney’s comments on the Bank’s latest inflation outlook and interest rate expectations.
Today's Economic Calendar
|9:30am||GBP||Markit Construction PMI (Jul)||52.8||53.1|
|10:00am||EUR||Producer Price Index (YoY)||3.5%||3.0%|
|12:00pm||GBP||BoE Interest Rate Decision||0.75%||0.50%|
|12:00pm||GBP||Monetary Policy Summary & Minutes|
|12:00pm||GBP||Quarterly Inflation Report|
|12:30pm||GBP||Inflation Report Press Conference|
|3:00pm||USD||Factory Orders MoM (Jun)||0.7%||0.4%|
|12:50am||JPY||BoJ Monetary Policy Meeting Minutes|