FTSE 100 in holding pattern ahead of BoE meeting

Posted by Joshua Mahony -
Scope Markets
  • European markets in holding pattern ahead of BoE announcement
  • BoE outlook key as we seek clarity over June meeting
  • Oil prices head higher after inventories drawdown

European markets are treading water in early trade as the looming interest rate decision from the Bank of England bring greater uncertainty after a period of outperformance that has seen the FTSE 100 hit record highs on a daily basis. The dollar looks set for another day of gains, with the greenback rising into a fresh one-week high as concerns build over a fresh resurgence in inflationary pressures. Comments from Fed member Collins highlighted the view that rates will likely have to remain elevated for some time yet, as price pressures continue to hinder efforts to normalize monetary policy. As things stand, the US economy looks to be in relatively rude health, although that could be a problem when it comes to driving down inflation,.

Today’s Bank of England rate decision looks to be more about the outlook rather than current rates, with markets pricing a mere 4% chance of a cut this time around. UK 10-year treasury yields have started to creep higher in early trade today, with traders clearly concerns that we could see a hawkish push from Bailey & co as recent inflationary pressures hamper calls for a swift dovish pivot from the BoE. With that in mind, the breakdown on votes and Bailey’s comments will likely provide the basis for volatility today, with markets currently showing major indecision over whether we will see the first hike in June (currently priced at 45%).

A resurgence in oil prices has hindered market sentiment this morning, with US crude looking to follow up on yesterday’s inventories driven rebound. With US crude inventories posting a 1.3-million-barrel drawdown, there are concerns that we could be entering a seasonal contraction in oil stocks as we kick-off the so-called driving season. Unfortunately, Joe Biden’s efforts to keep a lid on prices have come at a cost, with the Strategic Petroleum Reserves now at a 40-year low. With the DoE likely to provide a fresh source of demand going forward, there is a hope that the Israeli push further into Gaza does not spark a fresh rebound for oil prices. Coming off the back of a period that saw WTI lose $10 over the space of a month, the near $3 rise seen since yesterday’s low does raise concern that we could yet see another period of strength for oil.

Share this article:

Disclaimer: This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regardsto past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.

Payment Methods

Scope Markets
Scope Markets
Scope Markets
Scope Markets

Awards

Scope Markets
Scope Markets
Scope Markets
Scope Markets

Scope Markets offers institutional and retail trading services to businesses and traders worldwide. Our top management team has more than 20 years of experience in the industry, and we are proud of the solid partnerships we built over the years. Whether it's a business or individual, Scope Markets has a wide range of trading solutions that are compliant, flexible, cost-efficient, innovative, and place the client first.

Contact Us

Registered address:
6160, Park Avenue, Buttonwood Bay, Lower Flat Office Space Front, Belize City, Belize

Email:
customerservice@scopemarkets.com

Tel:
+44 2030 516959

Risk Warning

Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors. Trading in financial instruments may result in losses as well as profits and your losses can be greater than your initial invested capital. Before undertaking any such transactions, you should ensure that you fully understand the risks involved and seek independent advice if necessary. Please read and ensure you fully understand our Risk Disclosure.

Legal Information

RS Global Ltd is authorized and regulated by the Financial Services Commission of Belize ("FSC") under the Securities Industry Act 2021 with registration number 000274/2.

Restricted Regions

Scope Markets does not offer its services to the residents of certain jurisdictions. Please read carefully our Restricted Countries document.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

© Copyright 2022 Scope Markets. All Rights Reserved.