OIL: Benchmark U.S. crude rose 12 cents to $40.95 per barrel in NY. Cash earnings rose 1.3 percent compared with a year earlier, compared with a 0.1 percent decline in May. Packaging company WestRock rose $1.28, or 3.1 percent, to $43.23 and glass container maker Owens-Illinois gained 32 cents, or 1.7 percent, to $18.92.
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The Halifax house price index rose an annual 8.4 percent in the three months to July, same as in the June quarter. It fell 1.9 percent in a week marked by investor disappointment over the new stimulus measures announced by the country’s central bank and government. The index on Wednesday shed 0.2%. The Shanghai Composite was little changed, poised for a 0.1 percent weekly gain.
In a multipronged approach meant to grease the gears of the economy by making borrowing easier and cheaper, the Bank of England cut its key rate to 0.25 per cent from a previous record low of 0.5 per cent.
The BoE said it would take “whatever action is necessary” to achieve stability in the wake of Britain’s vote to leave the European Union.
‘The Bank continues to stand ready to take whatever action is needed to achieve its objectives for monetary and financial stability as the United Kingdom adjusts to new realities, and moves forward to seize new opportunities, outside the EU, ‘ Carney concluded his speech.
The U.S Federal Reserve is now the only central bank in the developed world that is on a path to tighter monetary policy – mainland Europe, Japan and Australia are all trying to prop up growth and inflation with a looser approach.
The pound fell to 1.3116 United States dollars from 1.3317 dollars on Wednesday.
The U.S. Treasury 10-year note yield was little changed at 1.502 percent after dropping 25 basis points overnight during a broad post-BoE rally in bond markets, which took the 10-year gilt yield to a record low of 0.639 percent.
Benchmark U.S. crude rose $1.10, or 2.7 percent, to $41.93 a barrel in NY after a 3-percent climb Wednesday.
The BoE had wrong-footed markets by keeping rates on hold in July, but since then its chief economist Andy Haldane argued the central bank should be ready to use a “sledgehammer” to tackle even tentative signs of a downturn.
Economists polled by Reuters expect US employers to have added 180,000 jobs, compared with 287,000 in June. “To get the market to move higher you need an underpinning of stronger economic growth”. “I expect a figure above 200,000”. The amount they can initially borrow is equivalent to 5 percent of their stock of outstanding lending to United Kingdom businesses and households.
The dollar index inched down 0.1 percent to 95.665 after gaining 0.2 percent on Thursday.
The BOE move pushed sterling 1.6 percent lower against the dollar on Thursday.
In commodities, oil pulled back slightly after rallying overnight following a modest stockpile drop at the USA delivery hub for crude futures. Crude prices had slid to a 3-1/2-month low below $40 earlier in the week on concerns of a global glut. Tokyo advanced 0.3 percent to 16,300.75 and Seoul’s Kospi rose 0.6 percent to 2,011.59. The Royal Bank of Scotland Group PLC (RBS.LN) was the worst performing stock on the FTSE 100, with shares sinking 5.2% after the bank said its first-half net loss widened to GBP2.05 billion (http://www.marketwatch.com/story/royal-bank-of-scotland-records-2- billion-loss-2016-08-05) ($2.68 billion) on soaring litigation provisions and more restructuring costs.
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ANALYST’S TAKE: More rate cuts and other easing measures look “very likely” in light of Bank of England governor Mark Carney’s “very negative” outlook in the event of Britain leaving the European Union, which foresees a rise in unemployment from 4.9 percent to 5.5 percent, said Angus Nicholson of IG in a report.
