Britain’s blue-chip FTSE 100 index was up 1.5 percent.
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“Many investors are indeed piling into gold as a hedge against their incremental stock purchases and growing low-quality bond portfolios, and that hedge has worked out well this year, and it will likely continue to in the near term”, said RBC Capital Markets in a report. The Labor Department said Thursday applications for unemployment aid rose to 269,000 last week, a level close to historical lows and a positive sign for the job market.
The 10-year JGB yield rose 2 basis points to minus 0.070 percent.
The bank cut its growth forecast for 2017 to 0.8% from 2.3% in May, and trimmed its 2018 forecast to 1.8% from 2.3%, but said the United Kingdom economy would probably avoid an outright recession.
Wall Street shares were little changed as investors were largely wary of making big bets ahead of Friday’s USA nonfarm payrolls report, data that may offer insight into the timing of the next Federal Reserve interest rate increase.
The BoE measures came as a relief on global markets after a string of recent disappointing announcements by world central banks from Tokyo to Europe that fell well short of expectations and dampened buying sentiment.
Although the move was highly expected by market participants, the British pound shed more than 1.50 percent, and some analysts and market experts are stating that USA stocks could gain from the interest rate cut made “across the pond”. It lost 1.1 percent against the euro, with the single currency last at 84.67 pence. Overnight, sterling fell 1.5 per cent to US$1.3114.
The larger than expected measures pushed the British pound down 1.6 per cent on Thursday, its biggest fall in a month.
Japan’s Nikkei .N225 advanced 0.3 percent, on track for a loss of 1.6 percent for the week.
Brent crude settled up $1.19, or 2.76 percent, at $44.29 a barrel, while USA crude settled up $1.10, or 2.69 percent, at $41.93.
The BOE’s Monetary Policy Committee cut its main interest rate to 0.25% from 0.5%, marking a low in the central bank’s 322-year history.
The Australian and New Zealand dollars, which have suffered in the past week from worries that central banks globally would not meet market expectations for further policy easing, rose around half a percent against the US dollar.
Economists polled by Reuters expect a non-farm payroll increase of 180,000.
OIL: Benchmark U.S. crude lost 14 cents to $40.69 per barrel in NY.
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USA crude was down 0.2 percent at $41.83 a barrel after surging almost 3 percent overnight. The key is to ditch poor-paying accounts and get creative as you can gain more in a top current account – some pay 3-5 per cent compared to one per centish on standard savings accounts. Brent crude, which is used to price worldwide oils, dropped 34 cents to $42.76 a barrel in London.
