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Good morning. We’re awash with central bank decisions, oil markets are calming down and the U.K. Supreme Court remains the focus of Brexit. Here’s what’s moving markets.
We’ll get the latest Bank of England interest rate decision later, the last one scheduled before the U.K.’s current Oct. 31 Brexit deadline. It comes after data yesterday showed U.K. inflation fell to its lowest rate since the end of 2016, below the BoE target rate, apparently driven down by the price of computer games and clothing. That’ll give Mark Carney more time to think about the implications of Brexit, and someone is stacking bets that a hard exit will make the BoE slash rates in the coming months. Here’s a decision day guide.
Fed’s Hawkish Cut
Federal Reserve policy makers lowered their main interest rate for a second time this year, but the dollar gained as Chairman Jerome Powell said that “moderate” policy moves should be sufficient to sustain the U.S. expansion, hurting hopes among some for deeper cuts. Needless to say Trump wasn’t pleased. “No “guts, no sense, no vision!,” he said of Powell on Twitter. The Bank for International Settlements, a.k.a the “central banks’ central bank,” reckons fears of a global recession might be overdone.
Oil Markets Relax
The oil market’s looking a whole lot calmer now. Crude held its decline overnight, up about 6% for the week, following supply assurances from Saudi Arabia and the International Energy Agency. The damaged Abqaiq oil facility is now operating at around 40% of its pre-attack levels and output should be fully restored by the end of the month, according to Saudi Aramco Chief Executive Officer Amin Nasser. Meanwhile, IEA Executive Director Fatih Birol said the global oil market remains well supplied with ample stockpiles.
Pound, Repos Eyed
Elsewhere in markets overnight, Australia’s dollar slumped after the unemployment rate rose, while U.S. stock futures retreated and Hong Kong shares fell as investors took note of the Fed. The pound is steady and hasn’t shown much of a reaction to Supreme Court judges’ deliberations, as they continue to narrow the British government’s room to maneuver on the second day of hearings in a landmark legal challenge to Prime Minister Boris Johnson’s suspension of Parliament. Meanwhile, investors betting yields long-term bonds will rise may have helped fuel the recent surge in repo rates, according to one money manager.
It’s not just the Bank of England providing rate decisions, we’ll also get them from Switzerland, South Africa and Norway, and that’s after the Bank of Japan left its monetary stimulus unchanged overnight. Elsewhere, growth in U.K. retail sales is expected to have slowed from a year earlier, and watch out for earnings from British high street bellwether Next Plc and Germany’s Rocket Internet SE for tech.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- World’s biggest insurance market is back in the black.
- Some influencers charge extra for “Close Friends” list.
- The world’s darkest tourism destinations.
- Alexa has learned Hindi in time for Diwali.
- India bans e-cigarettes.
- Fukushima hopes rugby can restore the region's image.
- A look around Amazon's newest and largest office.
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