Weekly Market Update (28 June 2021) – Bank of England gave no clues on QE tapering

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ByLCMS Traders FX Analysis Team

 JUN 28, 2021

(1) During his testimony last Wednesday, Fed Chairman Powell reiterated that the Fed will not hike interest rate over the possibility of a trigger in inflation. Instead, the central bank will wait for signs of actual inflation or other imbalances before taking up any considerations.

(2) The Bank of England (BoE) disappointed the market with no talks on quantitative easing (QE) tapering during their monetary policy meeting last Thursday. With regard to the recent rise in inflation, the central bank expects prices to pick up further, likely exceeding 3% for a temporary period. The BoE also mentioned that it will be able to evaluate the outlook of the economy more thoroughly during their next meeting in August.

(3) The IHS Markit reported that business activities in the eurozone expanded at the fastest rate for 15 years in June. The increase in business activities was driven by the further reopening of the eurozone economy as further progress was being made in the vaccination programmes. Despite the sharpest rise in firms taking on extra staff in three years, it was reported that a record rise in backlogs of work happened in June.