The stock market and the dollar index continued to rise in anticipation of the NFP data

On Thursday, the announcement of the results of the meeting of the Bank of England was an important event of the day, which left interest rates at the previous level of 0.1% and the volume of bonds redemption at £875 billion.

The Bank of England announced that the UK economy is heading for a rapid recovery amid vaccination measures. Despite downgrading its forecast for the year, the central bank pointed to expectations of a strong rebound. The Monetary Policy Committee has indicated that banks should prepare for the integration of negative interest rates if unforeseen circumstances arise. But no rate cuts are expected in the near future. The UK bond yields rose, with 10-year and 30-year bonds has been increasing to their highest levels since March. The pound hit its highest level against the euro since May.

Meanwhile, the French government has indicated that there is no need to integrate additional quarantine measures. The number of infections in France is high, but the situation has remained relatively stable over the past two weeks. French statistical agency INSEE estimates that a seven-week nationwide lockdown similar to November's will cut down the economy by 1% in the first quarter. But if the restrictions remain unchanged, an increase to 1.5% can be expected. The speed of vaccine introduction will be key in determining when the economy can return to its normal state.

Against this background and shortly before the publication of data on the labor market in the United States, the stock market and the dollar index continued to grow. S&P 500 futures contracts have renewed highs. Expectations are positive as Thursday’s benefit report showed that the number of filings fell to their lowest level since November.

Main market quotes:

S&P 500 (F) 3,872.62 +8.02 (+0.21%)

Dow Jones 31,055.86 +332.26 (+1.08%)

DAX 14,046.85 -13.44 (-0.10%)

FTSE 100 6,505.25 +1.53 (+0.02%)

USD Index 91.412 -0.138 (-0.15%)

• – Australia Retail Sales (m/m) (Dec) at 02:30 (GMT+2);
• – United States Nonfarm Employment Change (Jan) at 15:30 (GMT+2);
• – Canada Employment Change (Jan) at 15:30 (GMT+2);
• – Ivey PMI (Jan) at 17:00 (GMT+2).

by JMarkets, 2021.02.05

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.