The Bank of England’s Monetary Policy Committee (MPC) voted unanimously to slash interest rates to an all-time low; they also hinted that it might cut rates “close to but a little above zero” and could unleash more Quantitative Easing if needed.
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MSCI’s broadest index of Asia-Pacific shares outside Japan extended gains to 0.9%, headed for a 0.6% weekly gain.
Novo Nordisk sank10.08 percent in Copenhagen, after the pharmaceutical company slashed its sales and profit forecasts for the year, citing a hard USA market. The FTSE 100 of the United Kingdom gained 0.79 percent and the SMI of Switzerland finished higher by 1.40 percent.
Japan’s Nikkei, which earlier touched a near-four-week low on Thursday, rebounded to end the day up 1.1 per cent as the yen weakened.
Investors turn their attention to Friday’s USA monthly jobs report for the month of July for further indications on the strength of the labor market.
“There was a majority that expected to vote to cut interest rates again, were the economy to unfold in line with forecasts, and yes, I was one”, Broadbent said in an interview at the BoE, which was also attended by two other news organisations.
The BoE Governor Mark Carney, speaking on LBC radio, said that interest rates will only be cut further if deemed appropriate, adding that the public shouldn’t worry about credit supply as the current situation is not like the financial crisis.
Economists polled by Reuters expect USA employers to have added 180,000 jobs, compared with 287,000 in June.
The pound also eased to a three-week low against the euro, which rose to as high as 84.97 pence on Thursday and last stood at 84.80.
The Dow Jones industrial average fell 2.95 points, or 0.02 per cent, to 18,352.05, the S&P 500 gained 0.46 points, or 0.02 per cent, to 2,164.25 and the Nasdaq Composite added 6.51 points, or 0.13 per cent, to 5,166.25.
Further policy loosening in the United Kingdom helped push European shares up 0.6 per cent, while the dollar rose 0.2 per cent against a currency basket, drawing strength from a stronger-than-expected ADP jobs number on Wednesday.
Spot gold prices XAU= were down 1.8 percent to $1,336.25 an ounce, its worst drop in almost three months.
Oil pulled back slightly after rallying overnight following a modest stockpile drop at the U.S. delivery hub for crude futures.
While the rally fizzled out on Friday, prices remained well above 3-1/2-month lows hit earlier this week.
Brent crude was down 0.26 per cent at $42.99 a barrel, while USA crude was up 0.24 per cent at $40.93. It’s on track for a 0.4 per cent gain for the week.
The extensive series of measures was revealed with the central bank predicting that inflation would rise above its 2% target as a result of the falling value of the pound. Brent crude, used to price global oils, fell 22 cents to $44.07 in London.
The futures market is pricing in a 50-50 chance of another cut by year-end.
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The Aussie climbed 0.4 percent to $0.7659, and Australian shares also closed up 0.4 percent.
