The Bank of England kept its overnight rate unchanged at its policy announcement today. Overnight index swaps had priced in only a 1.5% probability of a 25 basis point cut. The BoE has four remaining policy meetings through the end of the year with the highest probability of a cut currently 62.3% at its next meeting on August 1st. The official rate is expected to drop from 5.25% currently to 4.33% by May of next year. The GBP is lower by 0.34% vs. the USD in trading today.
The U.S. Dollar Index is +0.19%, and if it holds will be the first gain after three consecutive daily declines.
The dollar is mixed against the major pairs today, the losses heavily weighted vs. commodity & emerging market currencies: -0.71% vs. NOK, -0.40% vs. BRL, -0.24% vs. TWD, -0.21% vs. AUD, -0.19% vs. CAD and -0.16% vs. MXN.
Primary dollar gains are vs. the safe-haven CHF (+0.87%) and JPY (+0.55%) on increased risk sentiment.
Oil is +0.86% today and is now +12.31% since the start of the rally begun June 4th.
Weekly Initial Jobless claims for the week ending June 15th were 238k, slightly above the 235k estimate. Housing Starts were reported at 1277k, short of the 1370k estimate. Building Permits were -3.8% compared to the +0.7% estimate, a wide miss even getting the direction wrong. Tomorrow’s Manufacturing & Services PMI, Leading Index and Existing Home Sales rounds out the week’s U.S. economic releases.
