Global Markets Enjoy BoE Boost Ahead Of US Data
LONDON, (UrduPoint / Pakistan Point News - 5th Augst,2016) - Asian and European stock markets mostly rose Friday, one day after the Bank of England announced a post-Brexit interest rate cut and surprise stimulus, and before vital US jobs data. Frankfurt, London and Paris extended the previous day's gains after the British central bank halved rates to a record-low to combat fallout from Britain's looming EU exit. Asian investors also pressed on with Thursday's rally after the BoE met expectations by cutting borrowing costs for the first time in seven years, to 0.25 percent. Policymakers also unveiled an emergency package worth up to #170 billion ($223 billion), including #60 billion for more bond-buying, or quantitative easing (QE). The BoE measures came as a relief on global markets after a string of recent disappointing announcements by world central banks from Tokyo to Europe that fell well short of expectations and dampened buying sentiment. The British central bank also expects to trim rates again later this year to just above zero and it could also expand the stimulus.
"European equity markets opened higher on Friday, as investors continue to digest yesterday's Bank of England decision and look ahead to today's US jobs report," said analyst Craig Erlam at trading firm Oanda. He added that BoE governor Mark Carney "gave investors a lot to think about yesterday". "Not only did he announce a stimulus package that exceeded market expectations, he also left the door wide open to further stimulus this year -- and that's if the economy performs in line with the their expectations. "Moreover, the projections for growth, inflation and unemployment clearly indicate that the central bank is very worried about the economic outlook for the UK." The news sent sterling plunging Thursday to $1.3114 in New York, from around $1.33 earlier in Asia.