Daily Market Commentary 6th August 2021

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The Bank of England left rates unchanged and QE firmly in place. The Banks Governor recognised the economic recovery but maintained the need for monetary stimulus to assist the recovery and the labour market. The Bank revised the headline inflation upwards, but used the generic line to avoid any retaliatory action, by labelling the cost of living pressures as temporary? How long is temporary? The GBP rallied on the news, to trade up to 1.3930, while the EUR was steady on 1.1825.

US equities rebounded strongly, following the losses of the previous session, sparked by a weaker than expected ADP Jobs Report. The Challenger Jobs report showed less than expected job cuts and Weekly Jobless Claims were inline with expectations. Non Farm Payrolls tonight are expected to be around 850,000 jobs added to the market. The AUD regained 0.7400, despite lockdowns being extended to Melbourne now and the NZD pushed up to 0.7050.

All eyes will now focus on the US Non Farm Payrolls and employment numbers released tonight. This is a key driver in markets and a big influence on the Fed and monetary policy.

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