Sterling Stabilizes After Initial Selloff, BoE Easing Not Automatic Despite First Cut
| Action Insight Mid-Day Report 8-1-24 |
Sterling Stabilizes After Initial Selloff, BoE Easing Not Automatic Despite First Cut |
Sterling suffered an initial sell-off in European trading and remained weak following BoE's decision to cut the Bank Rate by 25 basis points to 5.00%. However, it stabilized during Governor Andrew Bailey's press conference. The tight 5-4 vote to cut the rate underscored that monetary policy easing is not on auto-pilot for BoE. Bailey highlighted that today's reduction is a slight easing of policy restriction, maintaining that the policy must stay restrictive for sufficiently long. He stressed that the MPC remains "highly alert" to the risks of inflation persistence and will make future decisions on a "meeting to meeting" basis. Meanwhile, Yen softened today, digesting the gains it made earlier in the week. With USD/JPY touching a key Fibonacci level at 148.66, there is potential for a rebound in USD/JPY, i.e., a pullback in the Yen. Conversely, Swiss franc emerged as the strongest currency of the day, benefiting from safe-haven flows due to ongoing tensions in the Middle East. Also in the currency markets, Dollar and commodity currencies are struggling to find clear direction. The greenback is particularly focused on the upcoming ISM manufacturing data and tomorrow's non-farm payroll data for further guidance... |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2830; (P) 1.2847; (R1) 1.2873; More... Intraday bias in GBP/USD remains on the downside for the moment. Fall from 1.3043 is in progress. Decisive break of 55 D EMA (now at 1.2782) will suggest that rise from 1.2298 has completed with three waves up to 1.3043. Deeper fall would be seen to 1.2612 support and below. On the upside, above 1.2887 minor resistance will turn intraday bias back to the upside for stronger rebound. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 00:30 | JPY | Manufacturing PMI Jul F | 49.1 | 49.2 | 49.2 | | 01:30 | AUD | Trade Balance (AUD) Jun | 5.59B | 4.95B | 5.77B | 5.05B | | 01:30 | AUD | Import Price Index Q/Q Q2 | 1.00% | -0.70% | -1.80% | | 01:45 | CNY | Caixin Manufacturing PMI Jul | 49.8 | 51.6 | 51.8 | | 07:45 | EUR | Italy Manufacturing PMI Jul | 47.4 | 46.2 | 45.7 | | 07:50 | EUR | France Manufacturing PMI Jul F | 44 | 44.1 | 44.1 | | 07:55 | EUR | Germany Manufacturing PMI Jul F | 43.2 | 42.6 | 42.6 | | 08:00 | EUR | Italy Unemployment Jun | 7.00% | 6.80% | 6.80% | 6.90% | | 08:00 | EUR | ECB Economic Bulletin | | 08:00 | EUR | Eurozone Manufacturing PMI Jul F | 45.8 | 45.6 | 45.6 | | 08:30 | GBP | Manufacturing PMI Jul F | 52.1 | 51.8 | 51.8 | | 09:00 | EUR | Eurozone Unemployment Rate Jun | 6.50% | 6.40% | 6.40% | | 11:00 | GBP | BoE Interest Rate Decision | 5.00% | 5.00% | 5.25% | | 11:00 | GBP | MPC Official Bank Rate Votes | 0--5--4 | 0--6--3 | 0--2--7 | | 11:30 | USD | Challenger Job Cuts Y/Y Jul | 9.20% | 19.80% | | 12:30 | USD | Initial Jobless Claims (Jul 26) | 249K | 239K | 235K | | 12:30 | USD | Nonfarm Productivity Q2 P | 2.30% | 1.50% | 0.20% | | 12:30 | USD | Unit Labor Costs Q2 P | 0.90% | 1.60% | 4.00% | | 13:30 | CAD | Manufacturing PMI Jul | 49.3 | | 13:45 | USD | Manufacturing PMI Jul F | 49.5 | 49.5 | | 14:00 | USD | ISM Manufacturing PMI Jul | 48.8 | 48.5 | | 14:00 | USD | ISM Manufacturing Prices Paid Jul | 52.5 | 52.1 | | 14:00 | USD | ISM Manufacturing Employment Index Jul | 49.3 | | 14:00 | USD | Construction Spending M/M Jun | 0.20% | -0.10% | | 14:30 | USD | Natural Gas Storage | 22B |
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