Headlines:
BOE cuts bank rate by 25 bps to 5.00% in knife-edge callBOE governor Bailey: This was a finely balanced decisionBailey Q&A: We will make our judgements based on evidence from meeting to meetingUSD/JPY catches a bounce back above 150.00 for now10-year Treasury yields eye 4% mark next following post-Fed dropNasdaq Technical Analysis – Road clear for a new all-time high?This is the last thing that major central banks need right nowEurozone July final manufacturing PMI 45.8 vs 45.6 prelimUK July final manufacturing PMI 52.1 vs. 51.8 prelimUK July Nationwide house prices +0.3% vs +0.1% m/m expectedOPEC+ JMMC meeting to make no recommendation on oil output policy
Markets:
CHF leads, GBP lags on the dayEuropean equities lower; S&P 500 futures up 0.4%US 10-year yields up 2.3 bps to 4.056%Gold down 0.3% to $2,441.63WTI crude up 0.6% to $78.37Bitcoin up 0.1% to $64,645
The highlight of the session was the BOE decision. And in a knife’s edge call, the central bank voted to cut the bank rate by 25 bps to 5.00%. The vote was as close as it gets with five members voting for a cut while four members wanted to keep rates unchanged.
The pound weakened into the decision with cable already slipping from 1.2850 to 1.2760 before the announcement. Bailey & co. offered no confirmation of a follow-up move in September though and that is keeping markets more tentative. GBP/USD bounced back a little to 1.2790 levels now, still down 0.5% on the day though.
Besides that, the dollar is proving its resilience once again as it pushes back against the post-Fed drop yesterday. EUR/USD is down below 1.0800 for the first time in a month while the greenback is also steadier across the board. USD/JPY in particular is catching a modest bounce to 150.60 levels now, though price action has been volatile during the session.
In the equities space, tech shares continue to rally forward with S&P 500 futures up 0.4% and Nasdaq futures also seen thereabouts. Dow futures are flat though while European indices are suffering a poor start to August trading.
As we look to US trading later, the focus will slowly turn to the non-farm payrolls report tomorrow. But after the Fed yesterday, the risks there look pretty much asymmetric at this point.
This article was written by Justin Low at www.forexlive.com.
