All eyes are on the US Fed minutes

Thursday, October 08, 2015

The Bank of England announces its latest decision on interest rates and publishes minutes of the latest Monetary Policy Committee meeting today. Rates have been unchanged at 0.5% since March 2009 and we do not expect any surprises coming out in today’s announcement. RICS house price balance increased by 44% in September, missing analysts’ expectations of a 55% rise. The London equity benchmark index slid lower in early trade this morning, tracking losses in other European equity markets. Sterling hovered around 1.5330 against the USD in early trade.

German exports declined largely by 5.2% in August versus analysts’ estimates of a 0.9% drop. Imports retreated by 3.1% during the same period, missing estimates of a 0.6% drop. The DAX index retreated towards 9,940 in early trade, following the disappointing results. However, the euro edged higher and climbed towards 1.13 against the USD this morning. Asian equity markets reversed and slid lower overnight, as the recent upside rally has somewhat faded. The Nikkei index retreated nearly 1% towards 18,140, while the Hang Seng index dropped 220 points (1%).

Market participants will be keeping an eye on the release of the US Fed minutes this evening, looking for clarification of the current US economic conditions and prospects. Furthermore, investors’ attention will also turn to the IMF and World Bank Annual Meeting which will take place this weekend. The USD index currently remains under pressure, hovering around 95.0 against a basket of currencies.  

Crude oil prices rebounded this morning following sharp losses yesterday after the release of the weekly EIA oil inventories report showed a large increase of 3.07 million barrels for the week ending 2nd October. WTI front month futures recovered towards $48.50 per barrel and Brent futures edged higher towards $52.

USD hovers around 95.0 against a basket of currencies

DXY Curncy (DOLLAR INDEX SPOT)   2015-10-08 09-12-22

Events for today:

0001

UK

Sep

RICS House Prices

0700

DE

Aug

Trade Balance

1200

UK

Oct

BoE Rate Decision

1230

EZ

Oct

ECB Policy Meeting

1330

US

w/e

Jobless Claims

1530

US

w/e

EIA Nat Gas

1900

US

Sep

Fed Minutes

 

All times UK Local Time

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