GBP tumbled over 140 bps against the greenback after Bank of England announced its first rate hike in ten years while it kept a wary outlook on future economic growth.

A dovish-biased statement from BoE governor sent GBP/USD to its lowest level since Oct 6 at 1.305 area. Technically, GBP/USD may find some support around this area as it is an immediate support as well as the lower boundary of an upper-trending channel.

In the US, president Trump nominated Fed governor Jay Powell as the new Fed chair. This is largely within market expectation therefore we did not see spiking volatility surrounding this announcement. The appointment of Power is likely to bring more certainty and consistency in terms of Fed’s monetary policy next year. Market now anticipates another 25bps hike in Dec and three more hikes in 2018. The US dollar index remains ranging at the 94.7 area, little changed from the last few days.

Attention now shifted to tonight’s non-farm payrolls and unemployment data. Market expects some 310k new jobs added last month, according to Thomson Reuters. In the previous month, the jobs market unexpectedly lost 33k jobs due to adverse impact from the hurricanes. Therefore, we might see an increase in numbers as jobs market back to their normal levels. The non-farm payrolls are unlikely to be a game changer for Fed into its Dec meeting decision, but a big jump in numbers is likely to be dollar-positive.

Apple and Alibaba announced positive quarterly earnings results last night, beating most analysts’ forecast. Apple’s quarterly sales and profits hit $52 billion and $10.7 billion, topping market forecast of $50.69 billion and $9.7 billion respectively. The management also forecasted a record holiday season ahead due to the launch of iPhone X. its share price climbed 3% to a record high of $173 in after-hours trading.

Alibaba’s share price, however, ended slightly lower despite strong earnings. The company has registered $8.29 billion sales and net income of $3.32 billion in the last quarter, beating earlier forecasts by 5.9% and 24.8% respectively. The growth was largely driven by fast growing cloud computing and core ecommerce business. The company has also painted a brighter outlook into 2018, revising revenue growth forecast to 49-53% from the current 45-49%.

In Singapore, Sembcorp Industries disappointed investors with a 37% drop in its third quarter net profit. Starhub’s 3Q earnings were also slightly weaker than expected. UOB bank’s quarterly profit was slightly higher than expectation. Its EPS came to be S$0.52, higher than Bloomberg consensus of $5.03.

Technical Analysis:

GBP/USD

  • The 10-Day Simple Moving Average and SuperTrend (10,2) are both sloped downwards, suggesting bearish sentiment dominates
  • Immediate support could be found at the 1.305 area
  • Hitting the lower boundary of an up-trending channel, which serves as an support too

 

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.