Friday 2nd February 2024
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It wasn’t a unanimous decision by the Bank of England overnight. Some of the board wanted to lift rates, the majority wanted to hold, but there was one who still wanted to push them higher. All in all a March cut is now extremely unlikely according to NAB’s Gavin Friend, who says those pricing in 100bp of cuts this year have probably got it wrong. We also look at the fed’s decision, one day on. Shares are higher and bond yields lower, so it seems the prospect of delays in cuts hasn’t phased the markets too much. The latest ISM report painted a slightly more optimistic picture for US manufacturing, but prices remain a concern. Wages will be watched keenly, of course, in the non-farm payrolls out on Friday in the US. Jerome Powell said this week he was looking for more “good data” – maybe this will be one of those reports.
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