Market Wrap
Today the Bank of England Monetary Policy Committee unanimously voted to raise the official bank rate by 25bps to 0.50%. In the speeches after the rate decision, Governor Bailey said that he doesn’t think the bank’s failure to raise earlier will make them move further and faster to get inflation down. On the subject of inflation, Bailey said the MPC needs to focus on the inflation objective and that the impact of rising inflation on wage bargaining is important as the demand for workers remains robust and the job churn is elevated. The MPC’s outlook is one of high uncertainty and the downside risks are expected in the medium term.
See real-time quotes provided by our partner.
The pound responded as expected with the GBPUSD raising again today above the daily 200-period EMA. I am expecting a test of the previous swing high and for momentum to now carry Cable out of the descending channel bar any changes to the UK economic outlook or political landscape.
The ECB also offered no real surprises as they kept the deposit rate at -0.50% and reaffirmed that they expect the net asset purchases to end before they start hiking rates. The lack of Hawkish surprise put the EURUSD lower initially, but the subsequent press conference started, and the moves reversed with the euro reaching the 1.14500 price level.
See real-time quotes provided by our partner.
Whether it was the lack of the “2022 rate hike is unlikely” wording or the opening remark of the economy is continuing to recover, and the labour market is improving we’ll never know as we don’t own the algo’s, but it was perceived to be more Hawkish by the markets so hence they bid the euro and German bund yields higher. The ECB will maintain flexibility, but they see the economy muted in the first half of 2022. President Lagarde did say that the ECB is getting much closer to target inflation and that inflation might be significantly higher than expected, which certainly opens the door to a rate hike after a recalibration in March. So basically, after the Fed has done their first hikes, assuming they do.
In the US session, the US Markit Composite Final PMI for January came in above expectations at 51.1, the US ISM Services PMI for January came in just above expectations at 59.9 but factory orders month on month came in worse than expected and lower than the previous reading.
See real-time quotes provided by our partner.
Shares of Meta Platforms Inc. previously known as Facebook, plummeted as much as 26% today following the company’s earnings release the day before. This set the tone for the US indices which then brought down the global indices. The worst performer at the time of writing was the Nasdaq which was close to -3% lower.
The forex heatmap at the London close shows the euro is clearly the strongest currency relative to the others with the yen the weakest. The Kiwi has done well to stay strong against its peers as did the pound. There is no real sense of risk-on or off currently, so we’ll have to wait to see how London opens next week once we have digested the NFP numbers due tomorrow.
A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!
© 2020 YouTrading UK - Leaders in Trader Training.
Cookie | Duration | Description |
---|---|---|
__cfduid | 1 month | The cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information. |
_wpfuuid | 11 years | This cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon. |
cf_use_ob | This cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires. | |
cookielawinfo-checbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-advertisement | 1 year | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
Cookie | Duration | Description |
---|---|---|
YSC | session | This cookies is set by Youtube and is used to track the views of embedded videos. |
Cookie | Duration | Description |
---|---|---|
_ga | 2 years | This cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors. |
_gid | 1 day | This cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form. |
Cookie | Duration | Description |
---|---|---|
_fbp | 3 months | This cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website. |
fr | 3 months | The cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin. |
IDE | 1 year 24 days | Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile. |
test_cookie | 15 minutes | This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies. |
VISITOR_INFO1_LIVE | 5 months 27 days | This cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website. |
Cookie | Duration | Description |
---|---|---|
_gat_UA-42160853-2 | 1 minute | No description |
cf_ob_info | No description | |
CONSENT | 16 years 8 months 3 days 6 hours 2 minutes | No description |