The Bank of England is set to announce its policy, with a predicted interest rate cut of 25 basis points. The vote is anticipated to have 2 members for maintaining rates and 7 for a cut, with up to 2 possibly supporting a 50 basis points reduction.<\/p>\n
UK economic indicators have shown a mixed picture, with inflation rising and disappointing employment figures. The market anticipates an additional rate cut by year-end.<\/p>\n
In the US, attention will shift to the Jobless Claims report. Initial claims are expected at 221,000, up from 218,000, and Continuing Claims at 1,950,000 from 1,946,000. Recent data points to a “low firing, low hiring” trend amid tariff-related uncertainties.<\/p>\n
The outcome may influence perceptions of the Non-Farm Payroll data, with strong figures prompting reassessment and weak data strengthening rate cut expectations.<\/p>\n
Scheduled central bank speeches include Fed’s Bostic at 14:00 GMT and Fed’s Musalem at 14:20 GMT.<\/p>\n
As we approach the Bank of England’s decision on August 7th, 2025, a 25 basis point rate cut is widely anticipated. This fits the pattern we have seen this year, a gradual easing to support a fragile economy. Given that UK inflation surprised by rising to 2.3% last month while unemployment also ticked up to 4.6%, the Bank is in a difficult position.<\/p>\n
For traders, this mixed data increases uncertainty around the BoE’s statement, making options strategies on the GBP\/USD attractive. A more aggressive dovish tone could see the pound test its yearly lows, whereas any hesitation to cut could cause a sharp rally. We see implied volatility on short-term sterling options rising ahead of the announcement.<\/p>\n
Later in the day, attention will turn to US Jobless Claims, which are a key focus after last week’s softer-than-expected Non-Farm Payrolls report of 170,000 jobs. For most of 2025, initial claims have stayed in a tight range between 210K and 230K, a trend we also observed through much of 2024. A number significantly above the expected 221K would confirm a cooling labor market and strengthen the case for a Federal Reserve rate cut in the autumn.<\/p>\n
This data could directly impact interest rate futures, which are currently pricing a high probability of a Fed cut by November. A weak claims number would likely push those odds higher, benefiting long positions in SOFR futures. Conversely, a surprisingly strong number could lead to a quick unwinding of these dovish bets.<\/p>\n
We should also pay close attention to the Fed speakers, particularly the voting member, Musalem, at 14:20 GMT. His interpretation of the recent employment data could cause intraday swings in the US dollar index and short-term interest rate swaps. Remember how the Fed began this easing cycle with its first cut back in December 2024; any hint of a pause could catch the market off guard.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Bank of England eyes rate cut; US job data and Fed speeches to shape economic outlook expectations.<\/p>\n","protected":false},"author":62,"featured_media":17024,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-28448","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t