Bank of England Kept Interest Rates Unchanged

News Event

From Trading Economics: The Bank of England Monetary Policy Committee voted unanimously to hold the Bank Rate at a record low of 0.25 percent and to leave the stock of purchased assets at £435 billion on September 15th 2016, in order to bring inflation back to 2% target and to support growth and employment. The central bank also said that a majority of members would support a further rate cut in November if the outlook at that time is consistent with the August Inflation Report projections.

Market Snap



Market Wrap

In Asian Equity Markets stocks firmed on Friday after weak U.S. data reduced the already low chance of an interest rate increase by the Federal Reserve next week, sending the Treasury yield curve rising to its steepest level in 2-1/2 months. MSCI's broadest index of Asia-Pacific stocks outside Japan rose 0.4 percent, but was headed for a loss of 2.2 percent for the week. The Nikkei index gained 0.4 percent to 16,473.47 in midmorning trade. But for the week, the benchmark index has fallen 2.9 percent. The broader Topix gained 0.4 percent to 1,305.90 and the JPX-Nikkei Index 400 rose 0.4 percent to 11,711.99. The Australian index, S&P/ASX 200 gained 1.07 percent. China and several other markets shut regionally for holidays.

In Currency Markets the dollar eased versus the yen on Friday, struggling to gain traction after lackluster U.S. economic data further dampened already low expectations for a Federal Reserve interest rate hike next week. The dollar eased 0.1 percent to 102.02 yen. The greenback is down 0.7 percent for the week, with the yen finding favor as risk sentiment soured on worries that central banks are running out of ammunition to bolster economic growth. The euro was little changed at $1.1240. The Australian dollar inched up 0.1 percent to $0.7520 after posting a 0.7 percent gain on Thursday. The dollar index, which tracks the greenback against a basket of six major peers, remained steady at 95.261, and set to end the week little changed.

In Commodities Markets oil prices fell on Friday on worries that U.S. rig counts would continue to rise and that returning Libyan and Nigerian exports would stoke a global supply glut. Brent crude futures were trading at $46.32 per barrel, down 0.6 percent, from their last settlement. U.S. West Texas Intermediate futures were down 0.6 percent, at $43.67 a barrel. Gold was steady after the resurgence in risk appetite pushed it down 0.7 percent on Thursday. Spot gold was last trading at $1,314.64 an ounce, down about 1 percent for the week.  Spot silver fell 0.2 percent to $18.91 an ounce. Platinum lost 0.7 percent at $1,023.75, after falling to fresh over 2-month lows the previous session. Palladium was down 0.6 percent at $653.30 an ounce.

In US Equity Markets stocks rallied 1 percent on Thursday, buoyed by Apple's best four-day run since 2014, higher oil prices and ho-hum economic data that further dimmed expectations for an interest rate hike next week. The Dow Jones industrial average jumped 0.99 percent to end the day at 18,212.48 points and the S&P 500  rallied 1.01 percent to 2,147.26. The Nasdaq Composite climbed 1.47 percent to 5,249.69. The energy index rose 1.09 percent as crude prices increased. Chevron rose 1.10 percent. Apple rose as much as 3.4 percent on news the first quantities of its iPhone 7 Plus were sold out globally. Chipmaker Skyworks Solutions jumped 6.38 percent and was the top percentage gainer on the benchmark S&P index.

In Bond Markets the U.S. Treasury yield curve rose to its steepest levels in 2-1/2 months on Thursday after U.S. retail sales fell more than expected in August, further reducing the odds that the Federal Reserve will raise interest rates when it meets next week. U.S. benchmark 10-year Treasury notes fell 4/32 in price to yield 1.70 percent, up from 1.69 percent on Wednesday. The gap between five-year note yields and 30-year bonds yields widened to 130 basis points, the steepest curve since June 27.

Source: Institute of Trading and Portfolio Management