Focus of yesterday's session was on BoE interest rate decision and the following Minutes.Bank of England policy maker Ian McCafferty dropped his call for an interest-rate increase as officials cut their growth and inflation forecasts and signaled borrowing costs will stay low. The Monetary Policy Committee led by Governor Mark Carney left the benchmark at a record-low 0.5 percent, as the nine-member panel voted unanimously for the first time since July last year. While the rate outcome was forecast by all economists in a Bloomberg survey, just three out of 25 predicted the vote switch.
The February decision was published in London alongside new economic projections showing inflation will remain below 1 percent until the end of the year. “
The MPC judges the risks to the central projection to be skewed a little to the downside in the near term, reflecting the possibility of greater persistence of low inflation,” the committee said on Thursday. “Low realized inflation will continue to moderate the increase in wage pressure in the near term.”
In the US session Unemployment Claims figures were released.In the week ending January 30, the advance figure for seasonally adjusted initial claims was 285,000, an increase of 8,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 278,000 to 277,000. The 4-week moving average was 284,750, an increase of 2,000 from the previous week's revised average. The previous week's average was revised down by 250 from 283,000 to 282,750.
There will be no data releases from the UK tomorrow, with markets still being influenced by BoE Minutes. In the US session Trade Balance and NFP figures are scheduled for a release. Trade Balance deficit is expected to increase to $42.9 billion, while analysts predict increase by 189,00 in employment, with unemployment rate remaining unchanged at 5.0%.
Figures to watch:
Non-Farm Employment Change/Unemployment Rate (Friday 14:30)
Trade Balance (Friday 14:30)
