Keep an eye on mega-tech company earnings publication today

The Bank of England announced a monetary policy decision at 12:00 pm GMT and as widely expected it raised its benchmark interest rate by 50bps to 4.0 % with the 10th consecutive rate hike as it attempts to deal with high inflation and despite the risks of an expected economic recession this year. Furthermore, policymakers said, if there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required. However, some optimism came in the form of the forecasts, which showed inflation in one year's time at 3.01% (November forecast: 5.2%), based on market interest rates and model forecasts. The pound received a boost from this news and rose against the USD which saw some weakness following yesterday's decision by the FED to raise interest rates by 25bp and in essence signalling the potential end of its tightening cycle. Investors also received the long awaited ECB decision, which was the last major central bank decision of the week with the Bank announcing a 50bp hike as expected. This event continued to add to the volatility across European equity markets and the Euro which have had a mixed reaction to the decision with EURUSD pulling back from the 1.10 area as the German index approaches recent highs. While central bank decisions were a highlight of the week, they are by no means the last events worth keeping an eye on as mega-tech company earnings await us with Alphabet, Apple and Amazon publishing their results after today's US market close and with the NFP report being published tomorrow which will give an idea of the highly followed US job market and which could change expectations for further rate hikes by the US central bank.