We are ending the week with a bit of yesterday’s news.
Yesterday the Bank of England voted not to change the interest rates, though it is expected to lower them below zero at some point in the near future. In line with the forecasts, the central bank opted to support the economy by increasing its asset purchasing program by 100 billion pounds.
Data from the United States, on the other hand, disappointed investors. It was expected that the continuing jobless claims this week will be under 20 million for the first time since the pandemic began.
Nevertheless, the actual number was 20.5 million, which is higher than the forecasts and still dangerously close to last week’s level of 20.6 million. This result shows that the US labor market is not recovering fast enough. In addition, 1.5 million lost their jobs this week against a prediction of 1.3 million.
Today we also expect several reports. Data from the United Kingdom published this morning shows that retail sales recovered more than expected year-on-year, though the public borrowing exceeded the forecasts. The latter news was enough to ruin the GBP’s prospects and pushed the pound to three-month lows against the euro.
Later in the day several Federal Reserve board members will give speeches, likely addressing the latest fundamental data about the US economy. Fed Chairman Jerome Powell will be among them, but he will likely reiterate his views as stated in his testimony before Congress earlier this week.
In Europe, the meeting of EU government leaders continues. They are debating the European Commission’s proposal of a recovery fund worth 750 billion euro, which could seriously bolster the European economy and speed up its recovery, if implemented.
