Wall Street ended Thursday little changed ahead of the July U.S. nonfarm payrolls report later on Friday which will be scoured for clues to whether it is strong enough to support a Federal Reserve rate hike as early as September. The New Zealand dollar, known as the kiwi, strengthened as much as 73.06 cents, compared with 71.78 cents late Wednesday in NY, before paring gains to trade virtually flat at 71.79 cents late Thursday in NY. Those estimates are up from prior forecasts for 0.4%, 1.5% and 2.1%, respectively. Benchmarks in Taiwan, Indonesia and New Zealand also advanced. China’s Shanghai Composite Index edged up 0.1 percent to 2,982.43. Singapore and the Philippines declined.
Advertisement
Global equity markets rose yesterday, helped by a rally in European shares after the Bank of England cut interest rates and revived a bond-buying programme to cushion a blow to the economy from Britain’s June vote to leave the EU. It is also injecting an additional 60 billion pounds ($79 billion) in new money into the economy through a bond-buying scheme, and it will buy up to 10 billion pounds in United Kingdom corporate bonds.
MSCI’s world stocks index .MIWD00000PUS , which tracks shares in 45 nations, snapped a three-day losing streak and was up 0.33 percent.
“BoE governor Mark Carney’s assessment of the post-Brexit UK economy was very negative, predicting the unemployment rate will rise from 4.9% to 5.5% over the next two years despite the new stimulus”, IG market analyst Angus Nicholson wrote in a note.
Hammond responded that over the coming months the data from the real economy would be reviewed to see whether a fiscal response is needed in his Spending Review and Autumn Statement later this year.
The bank, however, noted that with interest rates already at a historic low, the ability of monetary policy to spur on economic activity was limited. “On the flip side, a decision to maintain interest rates and QE at their current levels could be a nasty surprise and markets generally do not like surprises”.
Economists expect the data to show the US economy added 175,000 jobs July, with the unemployment rate dipping to 4.8 percent from 4.9 percent.
The contract jumped $1.32 a barrel on Wednesday after the US government said stockpiles of gasoline shrank by more than 3 million barrels last week. While the pace of hiring and economic growth slowed in the first half of the year, consumers could spend more in the months to come.
It says growth will fall dramatically, announcing the biggest downgrade to its growth forecast since it started inflation reports in 1993.
USA crude was down 0.2 percent at $41.83 a barrel after surging almost 3 percent overnight. The contract jumped $1.10 on Thursday to close at $41.93. Brent crude, used to price global oils, fell 22 cents to $44.07 in London. It rose 81 cents the previous session to close at $44.29.
Advertisement
Against the yen, the dollar traded at 101.32 yen, not far from Monday’s low of 100.68 yen. The euro edged up to $1.1134 from $1.1128.
