When will the US go bankrupt? Will it start the market crash unseen before? We have plenty to share with you, so let’s get started.
2-0-7 - something new for the BOE
The Bank of England released an interest rate. As expected, it was left on hold at 0.5%. However, this time votes were divided: 7 members voted to keep the rate unchanged when 2 voted to hike. It can signal the rate increase in May. Moreover, the governor Mark Carney said that the prospects of excess demand over the forecast period, an ongoing tightening of monetary policy can support the inflation return to its target.
However, the statement contained mixed data. Let’s see.
- CPI inflation fell from 3.0% to 2.7% in February. And it is supposed to fall further, but it will stay above 2.0%.
- Pay growth continued to increase. And it is anticipated to rise further based on the tightening labor market. So growth in wages and unit labor costs will rise in the future.
- The unemployment rate stayed low.
- US GDP growth was weaker in the fourth quarter but the central bank sees indicators of exports and investment point to a stronger picture.
- Carney did not leave Brexit negotiations out of attention. According to the BOE’s release, Brexit will stay a source of uncertainty, weighing on households, businesses and asset prices.
Although we can anticipate a tighter monetary policy and soon rate hike, the Governor said nothing concrete. The statement was quite vague. Furthermore, investors anticipated the rate hike in May, so it did not become a surprise. As a result, the pound has weakened. If the greenback is able to recover, the sterling will fall further. The support lies at 1.4070.
The US Consumer sentiment will shake the market today. We are back with more news for you to enjoy!
Today, the US Inflation release at 15:30 GMT+3 will determine the further destiny of the major pairs and gold. The event is highly impactful, as the Federal Reserve will make decisions regarding further rate hikes based on it. Also, we brought you some news about XAUUSD and GBPUSD. Stay tuned!
Saudi Arabia agreed to cut oil production. What will happen with the oil price now?
The situation on the labor market still looks optimistic. Today we expect the Unemployment rate data. 3.5% is expected.
The first day of June should’ve brought us the US default. Unsurprisingly, the US House passes the debt ceiling bill at the latest possible moment.