Lukman Otunuga
ForexTime (FXTM)
Global equity markets have experienced a day of pain as fears around the aggressive decline in commodity prices and gloomy outlook for global growth weigh heavily on investor sentiment. The risk adverse environment combined with the latest emissions scandal regarding car maker Renault has punished European equities with jittery investors sending the FTSE100 -1.66% lower as of writing. This current selloff may extend into the American equity division which also closed negatively at the end of Wednesday’s trading session.
The bearish sentiment towards the pound descended to new lows during trading on Thursday following the dovish Monetary Policy Committee minutes which re-established concerns around the pace of economic growth in the United Kingdom. Both UK interest rates and asset purchase facilities were left unchanged as domestic concerns regarding the slowing wage growth and static inflation readings provided little pressure for the Bank of England to act. External anxieties highlighting the slowdown in the global economy, emerging market weakness and the aggressive decline in oil prices continue to leave the Central Bank wary on rate hike timings. The dovish MPC minutes today have reinforced the gloomy outlook for the UK economy and with any optimism rapidly fading around economic growth picking up in the fourth quarter of last year, interest rate expectations may be pushed back towards early 2017.
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