BOE hikes by most in 27 years. NFP Next

The British central bank delivered the sixth consecutive rate hike on Thursday, citing a cost-of-living crisis amidst increasing food and energy prices. The MPC said it expects inflation to continue rising despite jobs and unemployment remaining firm. It also projected it would be at its 2% target in 2025. The rate rise marked the first 50bps increase since 1997.

Key factors for Today

● BOE delivers historic interest rate hike but markets are unfazed by the action
● Tech stocks lead markets into a widely expected NFP Friday report
● 10-year yield higher as markets price in Fed’s ‘continue-to-hike’ narrative
● The US declares Monkeypox a public health emergency, supplies limited

Cable unimpressed by BOE Action

Despite the BOEs historic 50bps hike, the pound failed to gain traction against its peers and fluctuated between $1.2070 and $1.2220. The central banks pessimistic outlook likely played a role, as it forecast an impending five-quarter recession starting in Q4 this year and inflation to keep rising despite its efforts, potentially topping out at 13% this year.

US indices mixed ahead of July Jobs

Dow and S&P 500 track 0.08% and 0.26% lower, but Nasdaq 0.41% higher with a focus on the upcoming NFP results. Stock futures suggest July’s jobs report is expected to be upbeat.

Thursday was the most active day in terms of corporate reports, showing a separation between those firms which manage to pass on increased costs and outperform expectations against firms that have been dragged down by a stronger dollar.

US treasuries started to firm up as the market appears to be finally taking Feds insistence that rates will keep climbing seriously. The 10-year closed up 2.69% higher at 2.748%.

Monkeypox declared emergency

Monkeypox has officially become a public health emergency in the US in an effort to contain the virus’s spread, according to a top Health official. So far, only Denmark’s Bavarian Nordic has the 2-dose Jynneos vaccine for the disease, and supplies are running dry while cases double. Pharma manufacturers see a potential boost as the emergency declaration frees up government resources. FDA’s approval of other vaccines is paramount.

Movers and shakers

● Coinbase jumps 40% after it announces a partnership with Blackrock to give its clients access to cryptocurrencies. The stock ended only 10% higher by day’s close.
● Warner Brothers ended 9% lower after posting an unexpected loss of $3.4B in the first report as a fully merged company. It announced a redirection towards value instead of
growth at any cost, challenging the model of streamers. The firm also warned of increasingly challenging market conditions.
● Athenex jumps 61% on reports that Inas and Dr Reddys looking to acquire the firm
● Cloudflare is up 22% following better-than-expected results
● Virgin Galactic plummeted 7% after a net loss rise and the space tourism launch delay
● DoorDash soars 12% after a 23% spike in orders delivered despite reporting a larger loss

On Schedule

● Canada unemployment and Ivy PMI
● US Non-Farm payroll numbers