What you need to know:
• Fed policymakers remained on hold with interest rates but acknowledged solid economic growth confirming the outlook for December rate hike.
• The Bank of England joined Fed in a club of major central banks to increase policy rate but provided very dovish policy outlook.
Thursday’s market moving events
• The US weekly Jobless Claims rose to 229K last week, slightly less than the market expected.
• Fed Governor Jerome Powell is due to deliver opening remarks at the Alternative Reference Rates Committee Roundtable hosted by the Federal Reserve Bank of New York, via satellite.
• The New York Fed President Dudley delivers remarks at Alternate Reference Rates Committee Roundtable event.
• The US President Trump is expected to announce Fed Chair nominee, with Fed Governor Jerome Powell seen having the best chances.
Major forex market movers
• Sterling slumped 1% against the US Dollar in the aftermath of Bank of England hiking rates to 0.50% but also forecasting only two additional moves higher in next three years.
• EUR/USD remained exceptionally resilient to news from Fed and Bank of England, with the focus shifting to Fed chairman nomination today and Friday’s labor market report.
Earlier in Europe/Asia
• The PMI increased to 55.8 in October, up from 54.3 in September and the highest reading since May 2015.
• Italian manufacturing PMI rose to 57.8, up from 56.3 in September indicating strong growth of the sector.
• French manufacturing PMI posted 56.1 in October, unchanged from September and the highest since April 2011.
• German manufacturing PMI reached 60.6, unchanged from September’s 77-month high.
• Eurozone manufacturing PMI rose to 58.5, reaching the 80-month high in October.
• German unemployment rate fell to 5.5% in September, the lowest level since November 1990.
• The UK construction PMI rose to 50.8 in October, but optimism falls to lowest in almost five years.
• The Bank of England decided to increase the Bank rate by 25 basis points to 0.50% with 7-2 voting in favor of the move providing very dovish outlook for only two additional rates hikes in next three years.