BOE Governor Mark Carney Said Rate Cuts Will Be Needed as UK Growth Slows Down

by Alfonso Esparza

Global markets bounced back on Thursday as the end of the quarter flows and the reality of a prolonged Brexit process added much needed stability. Bank of England (BoE) Governor Mark Carney brought further pressure down on the pound as he said it is likely the central bank will cut the interest rate in the summer. The U.K. benchmark interest rate is at a record low of 0.50 percent with a cut now expected in August. Political stability in Britain is another victim of the collateral damaged caused by Brexit. Former London mayor and leading Brexit campaigner Boris Johnson has taken himself out of the running after failing to keep the support of his campaign manager Michael Cove now himself in the running for Prime Minister.

The Reserve Bank of Australia (RBA) will announce its rate statement on Tuesday, July 5 at 12:30 am EDT. The RBA has cut once this year to a record low of 1.75 percent. The Brexit fallout will intensify the negative effects of the China slowdown and weaker Australian employment numbers could see the central bank ease sooner rather than later to respond to macro headwinds.

The July 4 holiday in the United States will compress next week, which will be a busy one. The market’s focus will be centered on the U.S. non-farm payrolls (NFP) to be released Friday, July 8 at 8:30 am EDT. Other events to keep track of next week include: BoE Carney’s speech on Tuesday, July 5 at 5:30 am EDT, the minutes from the Federal Open Market Committee (FOMC) meeting in June on Wednesday, July 6 at 2:00 pm EDT, ADP Employment data and Crude Oil inventories on Thursday, July 7.

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