Morning Report: 07.00 London • This morning, the British pound is on the front foot despite the strong potential for an interest rate cut today. Markets are pricing in a 75% chance of a reduction from 0.5% to 0.25% today, but some analysts think the MPC could go further. No increase in QE is expected this meeting, but there will be sign posts for the August meeting.
• Meanwhile, world markets continue to unwind their risk-off positions, with the US dollar nipping back and the USD/JPY nudging higher.
` • The euro has been mixed since the turmoil of Brexit, but is pushing higher this morning against the US dollar. • Meanwhile, the Australian dollar is also making gains despite lower than expected unemployment figures this morning.
Coming up today:
• Coming up today we have the UK rate decision at 12.00, released alongside the monetary policy summary and asset purchase facility. Most are predicting a cut to 0.25. • Following this we have US PPI at 13.30, alongside unemployment claims and core PPI.
Trade Idea:
• Today we get to learn how much a rate cut is already priced in to the pound. A cut would not be a surprise and a larger cut closer to zero would only be a mild surprise to many.
Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.
Bank of England Eyes Historic Cut
Morning Report: 07.00 London
• This morning, the British pound is on the front foot despite the strong potential for an interest rate cut today. Markets are pricing in a 75% chance of a reduction from 0.5% to 0.25% today, but some analysts think the MPC could go further. No increase in QE is expected this meeting, but there will be sign posts for the August meeting.
• Meanwhile, world markets continue to unwind their risk-off positions, with the US dollar nipping back and the USD/JPY nudging higher.
• The euro has been mixed since the turmoil of Brexit, but is pushing higher this morning against the US dollar.
• Meanwhile, the Australian dollar is also making gains despite lower than expected unemployment figures this morning.
Coming up today:
• Coming up today we have the UK rate decision at 12.00, released alongside the monetary policy summary and asset purchase facility. Most are predicting a cut to 0.25.
• Following this we have US PPI at 13.30, alongside unemployment claims and core PPI.
Trade Idea:
• Today we get to learn how much a rate cut is already priced in to the pound. A cut would not be a surprise and a larger cut closer to zero would only be a mild surprise to many.
The pound may have some way to fall, but so might the euro as it too faces years of uncertainty. Despite a rate cut, it could well be a positive session today for the pound, especially against the euro.
A good way to play this is a HIGHER trade predicting that the EUR/GBP will close below 0.8300 in 14 days for a potential return of 163%.
Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.
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