BOE Rate Decision, Forward Guidance & Trade Woes

Following the Fed’s Interest Rate decision on Wednesday with a bright forwarding guidance and upbeat ADP, Private sector employment report, which revealed 215k were employed, bolstering the USD to maintain its current bullish stance.

Market participants are attentive to events coming out of the UK as the BOE is likely going to hike interest rates by 25 basis points. However, what is likely to sway investors decision will be the “forwarding guidance” from Govoner Mark Carney. Which could send the British Pound either, up or down due to Brexit woes, should it be put forward as a caveat.

Q2 Earnings are still unabated with about 385 companies reporting today.

Global Stocks:

Stocks worldwide are capricious to the downside. Asian shares fell as the Sino-US trade tariffs ping pong goes into another tense phase. Analysts at Bloomberg report of a loss of nearly $220 billion in equity market value since the Trade tiffs ensued.

European Shares slipped further due to downbeat earning reports from BMW, and Siemens.

• Germany 30: Fell 1.76% by the time of print 09:48 GMT to 12,510.36 range bound between 12,500.65 – 12,644.85
• UK100: was down 1.1% jumping in and out of loses from 7,632.43- 7,568.25 itching for a life line up. Although reports from PMI exist that the Uk’s construction sector expanded at a faster rate in 14 months.
• Italy 40: Plummeted by 1.82% in a tight range between 21,355.00 – 21,660.00.
• France 40: Lost 0.74% trending down from 5,483.74-5,445.91.

Earnings from the Technology sectors kept the NASDAQ afloat. Not so for the S&P500 which seems to be plagued by underperforming earnings reports from a throng of companies. The Trade spats between the US& China also restrains advancement in Global markets.

Currencies:

• GBP/USD has been in a bearish mood since Wednesday. On counts that 90- 91% of market participants have already acquired the GBP. Thus as the USD gained GBP sold off slightly ahead of today’s UK MPC, Monetary Policy Committee’s Decision on its interest rate. The Expectation is for a knee-jerk reaction a few moments prior and post, the announcement, at the time of print GBP/USD was 0.30% down between 1.3068 – 1.3144.
• USD/JPY although the USD gained some ground against a basket of other majors the Safe-Heaven Yen was resilient and bullish vs. USD which was down 0.26% oscillating between 111.40 – 112.15.
• EUR/ USD was in a dismal state the day upbeat PPI reports were unable to persuade investors to go long on the EUR.

 Commodities:

Oil price rose in early Asian trading hours. The temporal surge came as investors discovered that despite a build of nearly 3 million barrels in Crude Oil inventories as per the EIA, there was a significant drop in Gasoline inventories. Which means surplus oil could be used for Gasoline production. WTI Crude Oil price could not hold on to gains enough long as US Congress challenges OPEC’s authority and investors decipher the effects of the build up. WTI was found 0.89% down lingering between 66.92 – 68.14. while the DXY climbed 0.28% trending from 94.61 – 95.00.

The Gold spot is also on the rocks falling some 0.28% oscillating between 1,223.40 – 1,228.90 again due to the USD’s Strength and investors having a risk on appetite.  It is interesting to note that, the XAU/USD on the other has been consistently bullish ranging between1,215.24 – 1,221.15, however, may soon turn to the downside.

 Cryptocurrencies:

With no major and positive news, from the cryptocurrency front, most tokens are in a dovish state BTC/USD is struggling to hold on to gains up 0.07% at 7,578.3 although, down from today’s highs of 7,713.0.

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