BoE Needs More Evidence On Inflation – Europe Market Wrap

– US equity futures indicated a partial recovery on Wall Street as traders repositioned for the next round of tech megacap earnings and recalculated when they thought the Fed would cut interest rates. S&P 500 contracts increased by 0.4% after the index saw its steepest decline in four months on Wednesday.
– In the run-up to the latest update from members of the “Magnificent Seven” stocks that have surged amid aggressive expectations from investors for earnings growth driven by artificial intelligence applications and easier policy from the Fed, contracts for the tech-heavy Nasdaq 100 increased by 0.6%. The results from Apple, Amazon, and Meta Platforms are expected after the close.
– Following the BoE announcement, the pound moderated its decline versus the dollar and UK bonds declined. The central bank reduced its forecast for inflation this year and removed its guidance that borrowing costs might need to rise once more. The decision to hold rates was based on dissenting opinions among policymakers, with two voting in favour of a hike, one in favour of a cut, and six voting to maintain current levels.
– On a busy reporting day, the STOXX 600 index in Europe saw some fluctuations.
– While the Bank of England decided to keep rates at a 16-year high on Thursday, it also indicated that more evidence of moderating inflation was needed before it could ease policy. Fed officials signalled they are not in a rush to reduce rates as they target lower inflation, with Chair Jerome Powell saying after Wednesday’s decision that he does not think a cut in March is likely.