Bank of England Leaves Monetary Policy 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 November 3rd, 2016, in order to meet the 2 percent inflation target, in a way that helps to sustain growth and employment. Meanwhile, the Committee has dropped its guidance that the next move in interest rates is likely to be down as the inflation rate is expected to rise way above the central bank's target over the next three years. Policymakers also said rates could move in either direction depending on changes to the economic outlook.

Market Snap

Market Opening Wrap

In European Equity Markets stocks ended flat on Thursday, giving up early gains as a London court ruling complicated the Brexit process, boosting the pound and sending British blue chips to a five-week low. The pan-European STOXX 600 ended flat after eight sessions of losses, while the UK's FTSE fell 0.8 percent. Credit Suisse was a big loser in Europe, down 7.1 percent as investors cashed in on a recent rise in the price of the stock after third-quarter profit failed to match some expectations following strong results from U.S. rivals. ING rose 2.3 percent after the largest Dutch bank reported a better-than-expected 22 jump in its underlying net result on continued loan growth and higher commission and fee income.

In Currency Markets the U.S. dollar stabilized from multi-week lows against a basket of major currencies on Thursday on reduced U.S. election fears after a poll showed U.S. Democratic presidential candidate Hillary Clinton maintained a narrow lead, while the Mexican peso rallied.  The euro was on track to post its biggest daily loss against the dollar in nearly two weeks, reversing overnight gains that sent the currency to $1.1126. The dollar was last down just 0.14 percent against the yen at 103.15 yen. Sterling rose as much as 1.5 percent to a nearly four-week high against the dollar of $1.2494. The Mexican peso was up 0.7 percent at 19.2187. The dollar index was down 0.09 percent on the day at 97.308.

In Commodities Markets oil prices fell on Thursday as investors were still reeling from a record weekly rise in U.S. crude inventories and many remained skeptical about whether OPEC will actually implement its planned output cap. U.S. crude was down 1.8 percent, at $44.52 per barrel. Brent crude was down 1.4 percent, at $46.21 a barrel. It hit a session low of 45.99. Spot gold, lower initially, rose 0.2 percent to $1,298.91 an ounce.  Among other precious metals, silver fell 1.1 percent to $18.23, retreating from a high of about $18.73 on Wednesday, its best level since Oct. 4. Platinum was up 0.6 percent at $991.40 and palladium lost 0.8 percent to $623.25.

In US Equity Markets  stocks steadied in late morning trading on Thursday, with the S&P 500 on track to break its longest losing streak in five years, although a fall in Facebook's shares capped gains.  The S&P 500 was up 0.12 percent, at 2,100.4 and the Nasdaq Composite was down 0.13 percent, at 5,098.96. Twenty-First Century Fox rose 6.7 percent to $27.65 after it reported first-quarter profit that topped Wall Street expectations. Facebook fell as much as 5.5 percent to a more than three-month low of $120.12 after the social media giant warned that revenue growth would slow this quarter. American International Group fell 4.6 percent after the insurer's quarterly profit missed expectations.

In Bond Markets U.S. Treasury prices fell on Thursday, with long-dated bonds underperforming, after the Bank of England scrapped plans to cut interest rates and indicated that inflation is likely to rise further. Benchmark 10-year notes were last down 6/32 in price to yield 1.82 percent, up from 1.80 percent late on Wednesday. The yield curve between five-year notes and 30-year bonds  steepened to 132 basis points on Thursday, the steepest since June 27.

Source: Institute of Trading and Portfolio Management