Daily Alert – Thursday 22nd June 2023: BoE surprises markets with 50bp hike

Mark NugentDaily Alert, June 2023

Daily Alert – Thursday 22nd June 2023: BoE surprises markets with 50bp hike

Good afternoon.

Today, the Bank of England surprised markets by raising the benchmark interest rate by 50 basis-points to 5.00%. A 25 basis-point increase was expected. Markets are now certain that we will see a rate of 6.00% by year-end and yet higher in early 2024.

The GBP initially rose but has now completely reversed and is trading slightly lower than the pre-announcement level.

The behaviour of the GBP would indicate that markets are concerned about the possibility of the central bank driving the UK economy into recession as it tries to tame inflation.

Elsewhere, Fed Chair Powell was testifying before congress. He re-iterated last week’s comments that further interest rates are likely and the recent pause in hiking does not mean the cycle is over.

I’ll be back tomorrow with a short video of last week’s WTI trades.

VIP Club members can see today’s video, all brief trading videos, the Monthly and YTD Performance videos, the Trading Video Course and download the MTM Indicators software HERE