Yesterday was a Super Thursday as we had the Parliamentary vote on Brexit and the Bank of England released their inflation report and rate decision. Firstly, the Pound boosted as the High Court ruled against the government in a lawsuit on whether triggering Article 50 to begin the Brexit process would require a vote in parliament. Sterling surged higher, busting through two key psychological levels on abating concerns about hard Brexit. However, this process is far from over as the UK government plan to appeal the decision to the Supreme Court in December.
Shortly after receiving the shocking news from the High Court, the Bank of England announced their interest rate decision and published the latest inflation report. The BoE voted unanimously to keep rates on hold at record lows of 0.25% and upgraded their growth forecasts. The hawkish data aided the earlier Sterling rally initiated by the UK Parliamentary vote. The UK’s growth forecast for 2017 increased to 1.4% from 0.8%, which is a record upward revision, whilst inflation forecasts also rose to 2.75% from 2%.
The first Friday of the month has us all looking towards the release of the US labour data. The Non-farm employment figure is going to be closely scrutinised to see if another solid figure will be posted for October. A better than expected number this afternoon will add further pressure on the Fed to raise interest rates at the next FOMC meeting in December. The unemployment rate is also scheduled for release and is forecast to decline from 5% to a much healthier 4.9%.