Daily Market Report - 15/01/2016

GBP

Yesterday the Bank of England's rate-setting committee held interest rates at historic lows, while it cut forecasts for economic growth and inflation. The monetary policy committee (MPC) voted 8-1 in favour of keeping the benchmark interest rate at 0.5 per cent, with lone hawk Ian McCafferty staying in favour of a rate rise despite concerns over the global economy
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The BoE also lowered its forecasts for UK economic growth last quarter and this quarter by 0.1 percentage points to 0.5 per cent after data showed the manufacturing sector had shrunk by 1.2 per cent annually. 

Policymakers said the recent oil price fall would weigh slightly on inflation in the coming months, which is currently 0.1 per cent, sitting well below the Bank’s target of two per cent. Oil prices have fallen nearly 70 per cent since June 2014, and yesterday Brent, the global benchmark, slipped under $30 per barrel.

USD

The US had slightly disappointing jobs figures in the afternoon session when the number of applications for unemployment benefits unexpectedly increased last week; a sign labour market momentum may be starting to cool.

Concerns that a slowdown in China and other emerging economies will limit prospects for US growth have roiled equity markets and may make some employers more cautious about their staffing levels. A sustained pickup in the pace of dismissals that takes claims well above 300,000 will probably be needed to confirm demand for workers is waning.

Key Announcements

13:30 – USD - Core Retail Sales expected to decline to 0.2%

13:30 – USD - Retail Sales expected to decline to -0.1%

13:30 – USD - Producer Price Index expected to decline to -0.2%