The BoE cuts rates, the pound weakens, global stocks rise and investors await jobless claims report. Here are four things to know in the market today, August 4.
1. The Bank of England Cuts Rates
The Bank of England (BoE) made the decision to cut interest rates to 0.25% in a widely expected move after its policy meeting this week. The central bank will also expand quantitative easing by £60 billion, and corporate bond purchases will now be included in its easing plan.
U.K. businesses are also calling on the Chancellor of the Exchequer to deliver fiscal stimulus.
2. The Pound Weakens
The rate cut pushed the British pound lower against the dollar to $1.3221 immediately after the announcement.
In European morning trade, sterling had dropped to 1.3279 ahead of the decision.
According to a report from Reuters, market players were holding a record number of short positions on the pound.
3. Global Stocks Are Higher
Stocks in Europe and Asia were largely higher, but U.S. futures pointed to a mixed opening.
The MSCI Asia Pacific Index climbed 0.7% overnight. Asian shares rebounded from their worst decline in over a month.
The Topix index in Japan gained 0.9% as pressure eased on the yen and positive earnings lifted shares.
The Stoxx 600 Index was up 0.5% as banks rebounded from losses earlier in the week. S&P 500 futures remained flat.
4. Investors Await Jobless Claims Data
ADP, a payroll processor, reported on Wednesday that the U.S. private sector added 179,000 jobs. The report comes just days before the government’s July Employment Report. The jobless claims report is due later in the day, which will provide more insight into the labor market.
Data on June’s factory orders is also due today. Investors will be on the lookout for this report to paint an even clearer picture of the economy and labor market.
