Yesterday's session was marked by BoE interest rate decision and the following Minutes. The Bank of England kept its benchmark interest rate unchanged and announced no change to its asset purchase facility program, it said on Thursday. The BOE said it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that level since March 2009. The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.
Minutes from the central bank's policy meeting showed that eight members were in favor of leaving the key interest rate at a record low of 0.5%, in line with expectations and unchanged from the previous meeting. Dissenting member Ian McCafferty voted for a 0.25% hike in the benchmark rate to 0.75% for the fifth consecutive month. All nine members were in favor of making no changes to the central bank's £375 billion asset-purchase program. According to the minutes, rates are expected to rise gradually but to lower levels than previous cycles. The majority of policymakers said the expected pickup in
inflation would be “a little more modest than previously assumed.”
In the US session Unemployment Claims figures were released. In the week ending January 9, the advance figure for seasonally adjusted initial claims was 284,000, an increase of 7,000 from the previous week's unrevised level of 277,000. Analysts were forecasting decrease to 275,000. The 4-week moving average was 278,750, an increase of 3,000 from the previous week's unrevised average of 275,750.
There will be no major data releases from the UK tomorrow, with markets still being influenced by BoE rate decision. In the US session Retail Sales, PPI, Empire State Manufacturing Index, Industrial Production and Consumer Sentiment figures are scheduled for a release. Retail Sales are expected to decrease by 0.1%, PPI should decline by 0.2%, while Empire State Manufacturing Index should rose to -4.1. Industrial Production is forecasted to fell by 0.2%, while no change is predicted for consumer sentiment.
Figures to watch:
Retail Sales (Friday 14:30)
PPI (Friday 14:30)
Empire State Manufacturing Index (Friday 14:30)
Industrial Production (Friday 15:15)
Prelim UoM Consumer Sentiment (Friday 16:00)
