MARKET BRIEFING – LONDON OPEN 07.08.2015
Bank of England has displayed yesterday no urgency to raise interest rates, making it clear that the earliest increase could be expected not earlier than in 2016.
The Monetary Policy Committee voted 1-0-8 in favour of holding the interest rate at the current level of 0.5%. This move surprised the investors as it was lower than the projections, according to which at least two members were expected to vote in favour of the hike.
The Britain’s economic recovery continues with the wages increasing faster in the recent months and the overall job market improving. Nevertheless, the inflation level is still significantly lower than the target 2% and is at the moment one of the major obstacles to proceed with the tightening measures.
“We are clearly closer to the time at which rates may have to go up, but that does not mean we’re fixing some particular point in the future”, Ben Broadbent, Bank of England Deputy Governor said in his interview yesterday.
“As I saw it, I didn’t think there was any urgency to raise interest rates right now,” he continued.
Yesterday, the Bank of England broke with the tradition and combined the set of the MPC’s rates decision, the minutes of the meeting, and its quarterly inflation report, alongside Bank governor Mark Carney’s regular press conference together.
The inflation report has downgraded the near-term inflation forecast after the drop in the prices of oil has resumed. The Bank now expects inflation to remain around zero for the next two months, with the rise to the targeted 2% expected gradually to be reached in two- year time.
EURUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.1024
Target 2: 1.0820
Projected range in ATR’s: 0.0103
Daily control level: 1.1125
GBPUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.5612
Target 2: 1.5412
Projected range in ATR’s: 0.0079
Daily control level: 1.5670
USDJPY
The intraday technical outlook
Trend 1 hour: Up
Target 1: 125.36
Target 2: 124.10
Projected range in ATR’s: 0.627
Daily control level: 124.45
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9885
Target 2: 0.9727
Projected range in ATR’s: 0.0079
Daily control level: 0.9710
USDCAD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.3107
Target 2: 1.3008
Projected range in ATR’s: 0.0099
Daily control level: 1.2910
AUDUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 0.7426
Target 2: 0.7258
Projected range in ATR’s: 0.0084
Daily control level: 0.7260
GOLD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1101.47
Target 2: 1067.81
Projected range in ATR’s: 14.530
Daily control level: 1105.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 51.56
Target 2: 48.66
Projected range in ATR’s: 1.449
Daily control level: 55.50
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