• European stock markets open higher, on wave of optimism after 50bp Fed rate cut
  • Investors in the currency market await the Bank of England and CBRT decision; both at 12 AM BST
  • Secondary U.S. data: jobless claims, Philadelphia Fed regional index and CB leading indicators index

Yesterday's Fed rate cut met Wall Street's expectations; indexes are trading up after yesterday's rollovers. Powell communicated that the Fed is determined to keep the labor market strong without risking a slowdown with overly aggressive policies. The baseline scenario according to the Fed is a soft landing; rate estimates for 2025 indicated 3.4% vs. 4.1% previously, indicating fairly aggressive cuts, to 'neutral' levels and an additional 50 bp cut this year. The drop in yields is supporting cash inflows into equity markets.

Investors today expect the BoE to leave rates unchanged, which would likely strengthen the pound and support GBPUSD. The Bank of Turkey is also expected to leave rates unchanged. Important economic data from Poland will also be published at 10:00 am. The attention of the markets will still focus on 'hard' data from the US, where a slowdown in the economy or labor market, despite a larger rate cut, still may not please the markets. Volatility in the markets may be elevated, also taking into account tomorrow's Three Witches Day (massive rollovers in the options markets, the third Friday of each month, ending the quarter).

Macroeconomic data 

12 AM BST, Bank of England decision expected 5% vs 5% previously

12 AM BST, Bank of Turkey decision, expected 50% vs 50% previously

1:30 PM BST, US jobless claims, expected 231k vs 230k previously

3 PM BST, US, Conference Board index expected -0.3% vs -0.4% previously

3 PM BST, US, Philadelphia Fed expected -1 vs -7 previously

3:30 PM BST, US EIA natural gas inventories: 53 bcf vs 40 bcf previously 

Central bankers' speeches:

  • 10 AM BST - ECB Schnabel and Panetta
  • 12:30 AM BST - ECB / Bundesbank Joachim Nagel
  • 1:15 PM BST - BoE Vincent