Investors Have Taken a Wait-and-See Attitude Before the Bank of England Meeting

The demand for the US currency is still high despite weak economic statistics. Thus, the number of people employed in the nonfarm sector decreased by 20.236K in April, while experts forecasted a decrease by 20.050K. Today, financial market participants expect the next report on the initial jobless claims in the United States. Also, investors are focused on relations between Washington and Beijing. US President Donald Trump said on Wednesday that he was closely monitoring how China fulfilled its obligations under the "phase one" trade agreement signed earlier. The US dollar index (#DX) closed in the positive zone (+0.37%) yesterday.

The European Commission presented the Spring Economic Forecast, according to which the pace of economic recovery in the Eurozone would be uneven. As the European Commission expects, the EU unemployment rate will rise from 6.7% to 9% this year. Eurozone GDP is likely to fall by a record 7.75%, and in 2021 will recover by 6.25%.

The British pound has fallen in expectation of the Bank of England meeting, which will be held today. Since the start of the COVID-19 pandemic, the regulator has adopted a wide range of measures to support the country's economy, including lowering lending rates and expanding the quantitative easing program to £645 billion. Taking this into account, investors do not expect new incentives to be announced today. Still, they will closely monitor the macroeconomic forecasts and comments of the Bank of England regarding a likely further increase in the quantitative easing program.

The "black gold" prices continue to recover. Currently, futures for the WTI crude oil are testing the $23.85 mark per barrel.

Market indicators

Yesterday, there was a variety of trends in the US stock market: #SPY (-0.68%), #DIA (-0.81%), #QQQ (+0.62%).

The 10-year US government bonds yield has risen again. At the moment, the indicator is at the level of 0.70-0.71%.

• - Bank of England inflation report at 09:00 (GMT+3:00);
• - Bank of England interest rate decision at 09:00 (GMT+3:00);
• - Initial jobless claims in the US at 15:30 (GMT+3:00);
• - Ivey PMI at 17:00 (GMT+3:00).

by JMarkets, 2020.05.07

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.