After Super Thursday, the market will look at the U.S. non-farm payrolls.
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The Bank of England deputy governor, Ben Broadbent, has told the BBC’s Today programme there could be a further interest rate cut this year if needed.
Facebook rose 1.85 dollars (£1.41), or 1.5%, to 124.36 dollars (£94.89), and Broadcom gained 2.88 dollars (£2.19), or 1.8%, to 166.99 dollars (£127.42). Futures augured gains on Wall Street, with Dow and S&P futures both up 0.2 percent. Japan’s Nikkei 225 finished 1.1 percent higher. It lost 1.1 percent against the euro, with the single currency last at 84.67 pence. China’s CSI 300 index gained 0.2 percent, and the Shanghai Composite advanced 0.1 percent.
Oil jumped more than 3 percent on Wednesday and extended gains in Asian trade on Thursday, arresting its nearly constant fall since early June for now, after a larger-than-expected gasoline draw eased concerns about global supply glut. China will release a flurry of data over the coming week.
The BoE’s Monetary Policy Committee voted unanimously to lower interest rates for the first time since 2009, which follows a raft of weak economic data and the UK’s vote to leave the European Union.
The BoE said it would take “whatever action is necessary” to achieve stability in the wake of Britain’s vote to leave the EU.
On the other side of the pond, things are remarkably calm and while we are plumbing new policy rate lows here in the United Kingdom, we can easily see a supportive number from the USA jobs market today that reignites market belief of a Fed hike in December of this year. The yellow metal rose even as the dollar was climbing, up 0.1%, putting pressure on commodities priced in the currency.
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 USA dollar.
This is despite Carney’s warning to banks that they “have no excuse for not passing on this rate cut” during a press conference this morning.
Economists polled by Reuters expect USA employers to have added 180,000 jobs, compared with 287,000 in June.
“A September rate hike could only be justified if July and August’s payrolls prove exceptionally strong”, David Lafferty, chief market strategist at Natixis Global Asset Management, wrote in a note. I expect a figure above 200,000. “That should be positive for the dollar”. The dollar edged up to 101.31 yen from 101.28 yen while the euro fell to $1.1119 from $1.1148. It was down 1.1 percent at $1.3173 by early afternoon in London, while stock markets rose.
The dollar index, which gauges the dollar’s strength against a basket of other major rivals ended the session at 95.719, up from an earlier five-week low reading of 95.003.
Gold was also flat at $1,360.30 an ounce ahead of the payrolls report, heading for a 0.7 per cent gain for the week.
Oil extended losses after soaring overnight following a modest stockpile drop at the USA delivery hub for crude futures, which also triggered some short-covering.
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Benchmark US crude rose 1.10 dollars (83p), or 2.7%, to 41.93 dollars (£31.99) a barrel in NY after a 3% climb on Wednesday.
