httpvh://www.youtube.com/watch?v=1BdSfE7VZYE

The Bank of England decided to hold rates at 0.5% yesterday whilst also keeping ‘quantitative easing’ here in the UK to a level of £200bn.

This was never going to be a shattering shock; in fact this could have been the biggest foregone conclusion in FX markets in a long time. We are still of the belief that the MPC will keep major announcements to months within which we also have a Quarterly Inflation Report (next being February). As I emphasised to those present on the Bank of England conference call with me yesterday, the opening 3-5 months of 2010 will shape the next 18 months of the financial landscape. This meeting will likely be the one where they decide a pause in QE is necessary and then move to an exit strategy setting.

We have to swallow a bigger piece of data than the BOE report in the form of the US Non-Farm payroll figures. Most analysts were forecasting the first positive figure for 2 years until Wednesday’s poor ADP figure which showed an 84k decline against the consensus view of only 63k. We still believe it will be positive and are looking for a 15k increase. The release is at 13.30.

Other than NFP we have UK PPI at 09.30, EU unemployment at 10.00 and US unemployment rate at 13.30.

Have a good weekend.