3rd November 2017
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No big surprises yesterday as the BoE raised interest rates by 0.25% as was expected, and Trump announced Powell as the new Fed chair. He is largely expected to continue as per Yellen with monetary policy. The interest rate rise was accompanied by some fairly dovish comments by Carney, as it was basically just reversing the Brexit led cut last time. He remains of the opinion that it could go up or down next…
It is the first time in a decade that rates have increased, in order to curb high inflation squeezing UK households. The central bank’s committee voted 7-2 in favour of increasing the base rate from 0.25pc to 0.5pc. The pound plunged on currency markets as traders were disappointed by Carney failing to specify a time frame for future rate rises. That fall in sterling saw the FTSE finally break the 7520 resistance level and reach the 7560 one we have had all week. Above this we are still looking at 7600.
FTSE Outlook and Prediction
I am thinking a dip and rise scenario today, probably down to the support area at 7530 where we have the daily pivot. The bulls will be keen to hold onto the gains from yesterday having finally broken above 7520 and everything still looks fairly bullish really. That said, we are nearing the top of the daily Raff channels at at 7580, and with the fib level at 7586, we may see a bit of a stutter here. Above this then 7606 is the level to watch.
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