Carney's Contingency Plans

BoE remains unchanged however Cable rallies on hawkish tilt to statement

Previous Day's Market Highlights

The Bank of England, to no surprise, held rates at 0.75%. Carney has still suggested that nothing would change until March 2019, when the Brexit transition period begins. From here Carney mentioned that post-Brexit “the MPC response will not be automatic and could be in either direction”. Nearing some sort of deal, Cable had the best single day in over 6 months, surging 2%, breaking the 1.30 level once again. The BoE meeting took the spotlight away from disappointing manufacturing PMI for October, which got minimal attention.

To push cable to a 2% rise for the day, the release of the manufacturing ISM for October missed expectations to the downside. Although, it remained at a level consistent with solid growth for the sector. The data was somewhat unhelpful to the dollar.

The safe haven Yen slipped and the Australian dollar extended its rally on Friday as an apparent de-escalation in the U.S.-China trade war gave market confidence a significant boost during Asian trading.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1390 1.1463 1.1172 2.54%
GBP/USD 1.3027 1.3257 1.2693 4.25%
EUR/USD 1.1437 1.1620 1.1302 2.74%
GBP/AUD 1.7998 1.8735 1.7871 4.61%
GBP/NZD 1.9531 2.0481 1.9338 5.58%
GBP/CAD 1.7006 1.7286 1.6635 3.77%

Today's Market Highlights

Following yesterday’s Sterling boost, we can look forward to a data driven final day of the working week. This morning we have seen the release of EU States’ final manufacturing PMIs, with the Eurozone whole figure expecting to post a figure that suggests growth within the industry.

UK Construction PMI is due later this morning also, which is forecasting a growing figure which is slightly down on the previous month.

This afternoon we can look forward to the all-important non-farm employment change, this is one of the most important figures released in the United States as it shows the amount of jobs taken up excluding the farming sector.

Last month posted their lowest figure since April this year, we are however expecting to see a figure returning close to the average so far this year.

Today's Economic Calendar

Time Currency Release Consensus Previous
09:00 GBP Final Manufacturing PMI 52.1 52.1
09:30 GBP UK Construction PMI 52.0 52.1
12:30 USD Non-Farm Employment Change 190K 134K
12:30 USD Unemployment Rate 3.7% 3.7%
12:30 USD Averagee Hourly Earnings (y/y) 3.1% 2.8%