Making record highs have been the norm for the US equity market
An important week in terms of key central bank announcements
No Interest rate hike expected from BOE
US future are trading higher and picking up the momentum where they left off yesterday. Making record highs have been the norm for the US equity market throughout this year, thanks to the energy and tech sectors which have provided most of the tail wind. Speaking of the energy sector, both Brent and Crude are at their 30 month high today and investor are keeping are keeping a close eye on the upcoming inventory data. The oil leakage situation at the Forties oil field in the North sea is also having some positive impact on the price.
This is an important week in terms of key central bank announcements and currency traders are going to learn about their stance. The Fed will start their two day meeting tomorrow and it is widely expected that the Fed will be raising the interest rate by twenty five basis points. The US dollar index is rallying on the back of this, however, a lot of the momentum in the dollar index is also mainly due to the strong labour economic data which came out on last Friday.
The Bank of England will also be in the spot light on Thursday when it will occupy the stage. Theresa May, the UK prime minister has been able to shift gears in terms of Brexit negotiations after having a successful agreement with EU partners. The bank of England in its last meeting announced an interest rate hike and most of the market participants are of the mind frame that the bank was under tremendous pressure to adopt such a measure. No one in the market is expecting that the bank will announce another interest hike for some long period of time. The bank’s governor was somewhat lucky from not writing a letter to Chancellor of the Exchequer after the inflation data printed relatively a better number than the forecast.
The focus now turn towards the key economic data and it is evidently clear that the UK’s economy has been lacklustre as compared to other major four European economies.
