Sterling is sharply lower on Friday after the BOE raised rates by 0.25%, but said that it expected only “very gradual” further increases would be needed after this one, with possibly only two more 25bp hikes over the next three years. Cable is lower against all the other majors and had its biggest one-day drop against the Euro in over a year. In other headlines, the Republicans unveiled the tax cut bill, causing a minor dip in the dollar from which it quickly recovered, while Donald Trump has finally announced that Jerome Powell will be the next Federal Reserve Chairman, which was widely expected and has had little effect n the markets. Aside from Sterling, the other markets are little changed on Friday as we await the US jobs data, later in the session. In terms of data, the UK PMI construction rose to 50.8 in October, up from 48.1 and beat expectation of 48.5. German unemployment dropped -11k in October, larger than expectation of -10k, while the headline unemployment rate was unchanged at 5.6%. US initial jobless claims dropped -5k to 229k, below market expectation of 235k.
Friday will be pretty much devoid of economic data until the release of the US jobs data (exp 4.2%, NFP; 312k, AHE; 0.3%, AWH; 34.4), after which we will see the usual scramble into the weekend. Ahead of that, the Australian and Caixin China Services PMIs will be released, as will the Australian Retail Sales (exp 0.+4%mm), where a decent bounce from last month’s awful figure (-0.6%) is expected. That aside, the UK Services PMI will be released and may add to the volatility in Cable. All up though, the attention will be on the NFP.
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