Headlines:
- BOE cuts bank rate by 25 bps to 5.00% in knife-edge call
- BOE governor Bailey: This was a finely balanced decision
- Bailey Q&A: We will make our judgements based on evidence from meeting to meeting
- USD/JPY catches a bounce back above 150.00 for now
- 10-year Treasury yields eye 4% mark next following post-Fed drop
- Nasdaq Technical Analysis – Road clear for a new all-time high?
- This is the last thing that major central banks need right now
- Eurozone July final manufacturing PMI 45.8 vs 45.6 prelim
- UK July final manufacturing PMI 52.1 vs. 51.8 prelim
- UK July Nationwide house prices +0.3% vs +0.1% m/m expected
- OPEC+ JMMC meeting to make no recommendation on oil output policy
Markets:
- CHF leads, GBP lags on the day
- European equities lower; S&P 500 futures up 0.4%
- US 10-year yields up 2.3 bps to 4.056%
- Gold down 0.3% to $2,441.63
- WTI crude up 0.6% to $78.37
- Bitcoin up 0.1% to $64,645
The highlight of the session was the BOE decision. And in a knife's edge call, the central bank voted to cut the bank rate by 25 bps to 5.00%. The vote was as close as it gets with five members voting for a cut while four members wanted to keep rates unchanged.
The pound weakened into the decision with cable already slipping from 1.2850 to 1.2760 before the announcement. Bailey & co. offered no confirmation of a follow-up move in September though and that is keeping markets more tentative. GBP/USD bounced back a little to 1.2790 levels now, still down 0.5% on the day though.
Besides that, the dollar is proving its resilience once again as it pushes back against the post-Fed drop yesterday. EUR/USD is down below 1.0800 for the first time in a month while the greenback is also steadier across the board. USD/JPY in particular is catching a modest bounce to 150.60 levels now, though price action has been volatile during the session.
In the equities space, tech shares continue to rally forward with S&P 500 futures up 0.4% and Nasdaq futures also seen thereabouts. Dow futures are flat though while European indices are suffering a poor start to August trading.
As we look to US trading later, the focus will slowly turn to the non-farm payrolls report tomorrow. But after the Fed yesterday, the risks there look pretty much asymmetric at this point.
