Daily Alert: Friday 12th May 2017

Mark NugentDaily Alert, May 2017

Forex Analysis for Friday 12th May 2017

Economic Calendar

Thursday: Bank of England leaves interest rate unchanged at 0.25% as expected with only one dissenter who voted for an increase, as before. The Asset purchase facility was kept unchanged at 435B, voted for unanimously as before.

Bank of England Quarterly Inflation Report (QIR) Inflation Estimates: 2017: 2.8% (prev 2.7%) 2018: 2.4% (prev 2.6%) 2019: 2.2% (prev 2.4%) and QIR GDP Estimates: 2017: 1.9% (prev 2.0%) 2018: 1.7% (prev 1.6%) 2019: 1.8% (prev 1.7%).

Bank of England suggests that policy may need to be tighter than yield curve implies and that some MPC members would need relatively little upside news in growth or inflation to consider voting to tighten the interest rate.

Market Reaction

The markets are quiet with little movement in the USD or US equity indices. Oil rose above resistance and gold climbed as the US 10 Year yield lowered as the sentiment turned slightly more risk-off. The JPY strengthened and the Japan 225 had its first down day since exiting the consolidation zone to the upside. The EUR continued its slow post-election descent and the GBP dropped on the BoE statement although for reasons that are unclear. AUD bounces off support and the NZD drops on RBNZ comments as reported yesterday.

News Media

Nothing of note.

Today’s Calendar

US Headline and Core CPI and Retail Sales.

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