Bank of England keep rates unchanged

Yesterday’s markets

15th July 2016

  • GBP MPC Official Bank Rate Votes: 0-1-8
  • GBP Monetary Policy Summary
  • GBP Official Bank Rate: 0.50%
  • GBP Asset Purchase Facility: 375B
  • GBP MPC Asset Purchase Facility Votes: 0-0-9
  • USD PPI m/m: 0.5%
  • USD Unemployment Claims: 254K
  • USD Core PPI m/m: 0.4%

Yesterday afternoon, the Monetary Policy Committee were expected to unanimously vote to decrease interest rates from 0.5% to 0.25%. Much to the market’s surprise, the Bank of England has decided to keep interest rates unchanged in July. As such, the Pound gained ground against the US Dollar and Euro, soaring to $1.3440 and €1.2120 respectively, before retracing to $1.33 and €1.20. Whilst this has resulted to Sterling being driven up to 1.6% for the day, the BoE have left the door open for a cut in August.

Across the pond, unemployment levels are at their lowest since mid-April, where the US boasted the best unemployment claims in four decades. Further to this, the U.S. producer prices for June recorded the biggest gain in a year (0.5% against the predicted 0.3%) as the price of energy products and services increased. These figures support the bullish Non-Farm employment change seen earlier in the month, leaving a possibility for the Fed to raise rates before the end of the year.

Today’s markets

14th July 2016

  • GBP BOE Gov Carney Speaks
  • USD CPI m/m
  • USD Core CPI m/m
  • USD Core Retail Sales m/m
  • USD Retail Sales m/m
  • USD Empire State Manufacturing Index
  • USD Capacity Utilization Rate
  • USD Industrial Production m/m
  • USD Prelim UoM Consumer Sentiment

In the early hours of the morning, Chinese GDP and Industrial Production are released, with China’s pace of growth expected to continue. In the afternoon the focus will be on Mark Carney, who is due to speak about climate change and the financial markets in Toronto. In light of the Bank of England’s decision to hold rates, traders will be particularly scrutinizing his language, attempting to decipher any clues on future interest rate policies. Following on from this, at 1:30pm the US will release the CPI and Retail Sales figures.