E BoE: All Members Shared The Same Opinion

All the world’s eyes were on Thursday’s BoE (Bank of England) meeting regarding the prospects of the monetary policy. The MPC (Monetary Policy Committee) voted with a unanimous 9-0 for maintaining the main rate unchanged at 0.5%, as investors expected. Also, the Committee agreed with the same voting formation to keep at 375 billion pounds the asset purchasing program. At the same meeting, the BoE revised lower its growth projections for this year and the next two years: the 2016 forecast was revised to 2.0% economic growth from previous 2.2% while 2017’s expectation was lowered to  2.3% from 2.4% and 2018’s perspective for development was also restated at 2.3% from 2.5% previously. MPC is expecting that the 2% inflation target will be met in the mid-2018s.

The WTI (West Texas Intermediate) barrel maintained the strong bullish tone during the entire Thursday session, posting fresh yearly highs at $46.90 per barrel. The bid tone is a roll-over from Wednesday when the EIA (Energy Information Administration) report showed that the oil inventory figures dropped unexpectedly by 3.4 million barrels. Moving onward towards yesterday, another EIA report – the monthly OIL Market Report, said that the disruptions in output are due to Canada, Nigeria, or Libya’s national issues which are eroding the surplus. Also, he demand went up, surprising markets for the upside.

On Wednesday, the NZD/USD pair broke above the 0.6800 thresholds after the RNBZ (Reserve Bank of New Zeeland) released the semi-annual Financial Stability Report. According to the latest information, the housing and dairy sectors represent the major risks for the country’s financial outlook. The results in the report will most probably generate a response from the RNBZ, which will react by cutting the monetary policy rates at the next meeting in June. The risk of a sharp pull-back was already on the table, as the kiwi build up huge bearish bets around him. In the immediate aftermath of the release, the pair spiked high to 0.6826 to come back slightly and stabilize around the 0.6800 thresholds.