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Daily Review 16.09.2016

Bank of England holds interest rates steady but hints on another rate cut

Following the historic cut rate last August, The Bank of England unanimously voted to hold their interest rate steady at a record low of 0.25% on Thursday after the bank’s Monetary Policy Committee meeting.

The decision came from a unanimous 9-0 vote from MPC’s nine rate setters who also voted to keep the bond-buying program target at £435bn.

Governor Mark Carney reiterated that the bank do not see interest rates close to zero as the best course of action to weather the economic shock brought by the UK’s decision to leave the European Union last June.

With the rates unchanged this month, the central bank confirmed that another rate cut is still on cards, probably to 0.1%, by the end of the year, depending if the economy can continue to hurdle the Brexit’s initial shock.

In effect, the Great Britain’s pound dipped by 0.18% against the US dollar after the announcement and was last trading at $1.3216.

The biggest winner of the decision was the FTSE futures after it broke the 6700 level, erasing its previous losses since the start of September. The blue chip index advanced 6.99 points, or 0.85%, settling at 6730.30, its highest finish in a week.

Australia’s employment data for August miss big time

Last month’s employment data in Australia crossed the wires as it hit a big miss to a disappointing decline of 3900 jobs against the investors’ expectations of a rise of 15000, the Australian Bureau of Statistics reported.

The number of people participating in the work force dropped to 64.7% from 64.9% with the full time jobs rising to 11 500 while the part time jobs dropping 15 400. 

The unemployment rate registered 5.6% last month, spurred by the disappearance of 7600 jobs in Queensland and 9200 jobs in New South Wales.

After the disappointing job data, the Australian dollar slipped against its US counterpart on Thursday trading as it closed 0.34% lower at $0.7515.

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